How Do I Qualify For A Short Sale In Michigan?

For many Michigan homeowners, a short sale is a viable alternative to credit and reputation damaging foreclosures. In a short sale, the homeowners mortgage lender agrees to let the owner sell the house for less than its original purchase amount. Lenders agree to this arrangement when they determine that it would cost more to foreclose the house than it would to accept the short sale agreement.

For homeowners, short sales are often a far better option than foreclosure, since the credit damage incurred by a short sale is typically far less than the damage done by a foreclosure.

Before determining a short sale is the right solution for you, youll need to first determine whether or not you qualify. Its best to consult with a Michigan foreclosure and short sale real estate specialist, since these professionals are well-versed in lenders latest practices and the latest laws regarding short sales. If youd like to consult with an experienced Michigan short sale company regarding your eligibility for a short sale, contact Grand Rapids Sun Law Group.

As a brief overview, here are a few things you should know about qualifying for a short sale on your Michigan home:

Current Property Value vs. Mortgage
In nearly all cases, the current property value of your home needs to be lower than your current mortgage balance in order to qualify for a short sale. Different mortgage lenders may have slightly different criteria, however, and some lenders may be willing to make this qualification an exception under the right set of circumstances.

Keep in mind that mortgage companies accept only short sale offers which will prove to be more profitable than a foreclosure. You will need to prove that your homes mortgage is under duress and liable to default in order to have your short sale offer accepted.

Payment Default
To qualify for a short sale, most lenders require you first be in mortgage default. This means that you have missed monthly mortgage payments and have received a Notice of Default.

While this is generally true, some mortgage lenders are willing to accept a short sale agreement before the mortgage goes into default, provided you can prove the mortgage is in real danger of going into default soon.

Financial and/or Personal Hardship
To qualify for a short sale, youll need to prove you have long term financial difficulties which will prevent you from paying the mortgage in the months and years to come. This is important, since your plea for hardship will also determine the lenders willingness to forgive the remaining balance of your original mortgages debt.

Most mortgage lenders are willing to accept a number of circumstances as valid proof of hardship. Hardship circumstances are usually reviewed by the lenders Loss Mitigation Department, and presenting a strong hardship letter increases your chances of qualifying for a short sale.

Common hardships accepted by lenders include:
Unemployment or significant loss of income
Divorce
Medical emergencies
A death in the family
Intent to move out of state
Unforeseen upward mortgage payment adjustments or an increase in living expenses

Other Assets
Before accepting your short sale offer, your mortgage lender will want to determine that you dont have any other assets which could potentially be used to pay the mortgage off. You will likely be asked to submit tax returns, bank statements and other financial information.

If youre a Michigan homeowner in financial distress and you feel you meet all the qualifications above, contact Sun Law Group for help submitting your short sale offer. Remember, foreclosure is not your only option.