Posted on: 22nd May, 2009 08:58 am
We are leaving the our house because the job change. We are under water at about $100K for a $420 K loan. We still pay the mortgage on time in full. If we go to short sale of our house, will we lose anything like all the money in our saving. What will we actully lose from a short sale?
With th short sale you will lose all the money you put in that house ( Down payment and any princiapl payment you made every month).
You will have an hit on your credit score. probably 150 - 200 points.
If you lender agrees for a short sale, please make sure the terams are spelled out correctly in the document. Probably they will end of sendign you a 1099C forum. Which will you will need to show as income when you file your taxes next time.
You do nto need to pay taxes on the differnec since the current law helps you to avoid that and it will go away in 2012.
You will have an hit on your credit score. probably 150 - 200 points.
If you lender agrees for a short sale, please make sure the terams are spelled out correctly in the document. Probably they will end of sendign you a 1099C forum. Which will you will need to show as income when you file your taxes next time.
You do nto need to pay taxes on the differnec since the current law helps you to avoid that and it will go away in 2012.
So I would be able to keep everything except the house and the credit, right?
Correct.
Make sure the terms are spelled out correctly when your lender agrres for the short sale.
Saying " They will not be comign after you for the difference"
Make sure the terms are spelled out correctly when your lender agrres for the short sale.
Saying " They will not be comign after you for the difference"
To answer your question...the lender can not come after your savings. If they know of the savings they will most likely ask for you to sign a promissory note for the difference of what you sold the house for as a short sale and what is owed. i.e. If you you sell the house for $150 but owe $200...they would ask for a note of $50K. A 1099 would be issued since the $50K would be considered income however if this is your primary residence you would not have to pay these taxes as you are protected by the Mortgage Debt Relief Act.
I buy short sales and negotiate direct with lenders to have a short sale approved. Feel free to visit my web page on activerain a site for real estate professionals.
activerain (dot) com/blogs/kennywagner
I buy short sales and negotiate direct with lenders to have a short sale approved. Feel free to visit my web page on activerain a site for real estate professionals.
activerain (dot) com/blogs/kennywagner
On this same topic, when applying for a short sale, the lender/bank asks you to list all of your bank accounts, investment accounts, 401k, etc etc. Do you have to list all of them and if you don't can they find out about the ones you didn't list?
Another Question
Welcoem to the forum
I think it is always good to be honest. Especially in the electronic age, most of these can find out what you have in what accounts.
Lenders want to know this to make sure that you are not able to pay the difference. As you know the lender i nto in the a charity business, they are in this to make money
good luck and feel free to ask
Welcoem to the forum
I think it is always good to be honest. Especially in the electronic age, most of these can find out what you have in what accounts.
Lenders want to know this to make sure that you are not able to pay the difference. As you know the lender i nto in the a charity business, they are in this to make money
good luck and feel free to ask