When should I short sale my house?
(Disclaimer:This is not legal advice,it is for informational purposes only)
Deciding to sell a home is always a huge decision for any family. So it should never be taken lightly. But as in most major decisions in life there are financial and personal aspect to the choices.
If you absolutely love your home and you don’t want to lose it then you need to fight for it. If on the other hand you are not that committed emotionally to your house then it becomes more of a business decision.
From a business point of view if the following are true:
1. Your mortgage Payments, Interest, Taxes and Insurance (PITI) is more than 40% of your total Gross income coming in the house from all earners.
2. Your current payments are 33% more than a comparable rental in your area.
3. You are 25% upside-down with mortgages over today’s market value of your house.
4. You’ve been repeatedly denied for modification.
5. You’ve been through a bankruptcy and you still can’t afford the payments.
6. It’s just too big a house.
7. You are killing yourself to earn enough to pay the mortgage.
You might consider short selling your property and downsizing or buying something that is priced at today’s market value.
Sometimes you need to clear the slate and reduce your debt load. Especially if the value of the property isn’t supported by the monthly cost of the note.
Calculate your total mortgage payments over 10 years, how much you will have paid and how much the note/s will be reduced in principle. Given the unpredictability of future values conservatively increase off of today’s value only 20%. Sometimes looking out over 10 years is very helpful in deciding if a short sale makes sense. If these numbers don’t make sense then Short Sale might be a good option.
In California you have SB-931(1st TD) and SB-458 (2nd TD) in protecting homeowners from deficiencies in Short Sales.
It is important to weigh all aspects in selling a home: Moving Costs, Credit Damage, Deficiencies, Tax Implications etc.
GA LAW GROUP can go over your individual situation in review for possible Short Sale.
