I bought my house last January and massively overpaid. It was my first time buying a house, and I rushed into it because my apartment was being sold and my living situation was in jeopardy.
Fast forward one year later and I want out. It’s not even remotely worth what I paid. I’ve thought about renting it out, but I don’t think I can get enough to cover the mortgage. I can try to sell and break even and hope someone else is as dumb as I was, but it seems unlikely. I could just keep living here, but I’m about to get married and my fiancé and I are considering a big move elsewhere.
I am wondering if a short sale could be a possibility for me even though I’m not behind on my mortgage or struggling financially. To be clear, I’m not rolling in dough either, but I’m getting by. I was thinking of listing the house for slightly higher than I paid and seeing if I get any offers. If I don’t get any offers or the offers are lower than I owe on the mortgage, can I propose a short sale? I saw on another thread that it’s difficult to qualify if you’re not behind on payments.
Any insight or advice would be much appreciated.
Can I qualify for a short sale if I’m not late on my mortgage?
byu/psychadelic_microbes inRealEstate
Posted by psychadelic_microbes
5 Comments
Most lenders won’t approve a short sale unless you can prove financial hardship – being current on payments actually works against you here. They want to see you’re genuinely struggling, not just underwater on value
Your best bet is probably trying to rent it out even if it doesn’t fully cover the mortgage, then reassess the market in a year or two
A short sale effects your credit similar to a foreclosure. And a bank is not going to approve your short sale if it thinks you have the ability to pay.
As was stated, you will screw your credit which will impact your ability to get loans and you will pay higher for all things with interest rates and insurances. In some states, employers will look at your credit score to evaluate your fitness for a job. If you are OK with driving used cars and paying cash for everything for a few years and have other debt to strategically discharge at the same time, you can just walk away from everything in a non-discourse state.
do you dislike the house other than you feel you overpaid?
How much underwater are you? You are allowed to sell a house for less than what you paid. Some people genuinely walk away with nothing or even owe money at closing. Is about how much can you afford to pay at closing. Short sales hurt your credit pretty bad.