Why would your lender consider doing a short sale with you? A hardship on your part that will keep you from being able to make the monthly payments.
To complete a short sale you will need some form of a serious hardship to receive an approval. Much like getting approved to buy the house in the first place you will need to get approved to sell it short..
When you are applying for a short sale you will be asked to write a hardship letter that is going to outline to the lender why you are no longer able to make mortgage payments on your home. This letter is one of the items your lender will require in deciding if your short sale will be approved.
It can make sense to a lender even when there is not a financial hardship on the borrowers part to grant a short sale approval, but it is less likely. In this case you can almost be certain the lender will either ask you for a cash contribution at closing or sign a promissory note. It may even be a combination of the two.
A valid short sale
hardship often is caused by one of the following reasons:
Reduced income from a borrowers extended job loss, disability, illness, or just fewer hours available at work that a causes the inability to continue to make payments.
Serious Marital Problems – Separations and divorces are honest reasons a lender will consider a short sale.
A rise in expenses – Reasons could include an increase in dependents, a health problem, etc.
An increase in significant debts – charge cards bills (but make sure this wasn’t from over spending on bigsreen TV’s or designer purses), doctors bills, attorney’s fees and other similar types of personal debt.
Death – Death of a family member who was a contributing factor in keeping the mortgage current. Also the corresponding loss of income or medical bills associated with the death such as funeral expenses, etc.
Relocation because of a job – Fifty plus miles is a hardship lenders will consider, when the change in employment location is required to remain employed.
Armed Forces service – There are some lenders that will accept being called into military service as an acceptable hardship.