Do I have to be late on a mortgage payment to apply for a short sale?
Many homeowners and borrowers think that they need to be delinquent or late on a mortgage payment or two before they can ask for a short sale. But this just isn’t the case. At this point though, many homeowners simply neglect to have any communication with their lender and eventually will be foreclosed on.
A foreclosure is much harder on your credit history and report than a short sale. Especially if you are up-to-date and current with your mortgage payments, a short sale may not be nearly as bad of hit as if you were delinquent or fell into foreclosure. Simply walking away from the property is one of the worst things you can do.
If you are currently up-to-date with your mortgage payments but are finding it more and more difficult each month to make that payment or you have a large balloon payment coming up and certain circumstances are making it very difficult to make your payment each month, a short sale may be the relief you need.
The first step is to talk to a short sale specialist or agent in your area that knows the process, the details behind each transaction, and can communicate to your lender on your behalf. They will discuss your options and if you choose to stay in the home, the lender may offer you alternatives such as a refinance, mortgage modifications, or other programs currently available.
If a short sale does seem inevitable, you will need to write a letter of hardship to the lender explaining the difficulty you are having paying your mortgage payment. Many times job loss, medical bills, or other hardships can cause bills to back up and makes it difficult to come up with the mortgage payment each month. Simply communicating this to your lender and allowing them to decide whether this is a true hardship with the amount of income and the amount of debt you currently have, can alleviate a load of stress off of your mind.
If however, you do make enough in your current income and occupation, do not have a lot of debts or foresee debts in the future, and can reasonably make your mortgage payment each month, the lender is not likely to allow a short sale to continue.
The very best option is to contact a short sale agent or your lender to discuss options and the steps involved that you will need to take to get on the short sale path quickly and efficiently.