For those Knoxville homeowners who have completed a short sale this year, the extension of the Mortgage Forgiveness Debt Relief Act and Debt Cancellation is extremely important. The Mortgage Forgiveness Act expired on December 31, 2013, meaning that without the extension through 2014, any homeowner who completed a short sale would be responsible for paying taxes of the forgiven debt. Luckily, both the House of Representatives and the Senate extended the act through 2014, and President Obama is expected to sign off on the extension soon.
So what does the extension of the Mortgage Forgiveness Act mean for Knoxville homeowners who have been through a short sale? Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Olivia, she asks, “I am doing a short sale on my Knoxville home. I bought the home back when the market was hot in 2007. I owe $40K more than what it would sell for and the house is much larger than I need now, since my kids have moved out. I managed to stay current on my Knoxville mortgage payments, even though the payments have been difficult for me to make. I want to buy a home again right after my Knoxville short sale is approved. Is that possible?”
Olivia, this is a very common question that many people ask after completing a Knoxville short sale. This question can be difficult to answer because it all kind of depends on the situation. Here are a few different scenarios that influence a person’s ability to buy after a Knoxville short sale. In most cases, there is some kind of wait time before you are able to buy a home again.
Credit score is a large factor that will influence your ability to buy again. How much your credit score is influenced by a Knoxville short sale depends on how long you missed payments, how your short sale was reported, and if you missed other payments like credit card or car payments. There is no given number for how much a credit score with drop after a short sale, it just depends on the situation. In order to buy a Knoxville home again, you will need to have a credit score high enough to qualify for a loan. Read the rest of this entry »
For those Knoxville homeowners who have completed a short sale or plan on completing a short sale, the extension of the Mortgage Debt Relief Act is very important. On December 31st, 2013, the Mortgage Debt Relief Act expired, meaning that any homeowner that completed a short sale this year would have to pay income taxes on the forgiven debt, if the act is not retroactively extended by the end of the year.
So, will the Mortgage Debt Relief Act be extended?
It all comes down to Congress, who is currently in their last session of the year. If Congress opts to retroactively extend the act, any homeowner that completed a Knoxville short sale this year would not be required to pay income taxes on the forgiven income, so long as they meet the requirements. If the act is not extended, any homeowner who completes a short sale this year would be responsible for paying taxes on their forgiven debt. Luckily, the Mortgage Debt Relief Act is one of the items on the agenda for Congress to vote on. Read the rest of this entry »
In a Knoxville short sale, a hardship letter can be a very key ingredient in getting a short sale approved. So, what exactly needs to be included in a hardship letter? Read on to find what key ingredients need to be included in a hardship letter, in order to help get your Knoxville short sale approved.
Knoxville short sale lenders see a lot of files, which is why keeping a Knoxville hardship letter short is important. A long winded letter detailing every moment of hardship could easily cause them to get distracted andonly briefly skim the letter. A short, efficient short sale letter that gets to the point is typically better.
In addition, it is very important that a short sale hardship letter is honest. An honest short sale letter will come off as sincere and real, which is much more likely to get the approval of a short sale lender. As a seller, you should have nothing to hide from your short sale lender. They already have all of your financial records and pay stubs, an honest short sale letter can help humanize your situation. Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Paige, she asks, “We’re doing a short sale on our Knoxville home. My husband and I own our own business and have had significantly less profits over the past few years, which forced us to miss a bunch of payments. We’re financially very strained and I’ve heard that sometimes lenders are willing to give relocation assistance for completing a short sale. How do we find out if we’re eligible for relocation assistance?”
Relocation assistance is available in some cases to Knoxville homeowners that complete a Knoxville short sale. It can be difficult to say whether or not you’ll be eligible, since it depends on the short sale program or the lender, as well as your specific qualifications. Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Zoey, she asks, “I’m about to finish a short sale on my Knoxville home. I’m concerned about what the overall outcome of the short sale will be. Once the short sale is approved, how will I know if my liability has been released?”
There are many reasons to complete a Knoxville short sale. One large reason to do a short sale is to get a release of liability. This means that a lender is accepting less than is owed on a Knoxville home and agrees to release the remaining liability, which means the seller would not be pursued to a for a deficiency judgement. Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Marc, he asks, “Over the past year, it has become very difficult to keep making payments on my Knoxville home. I met with a realtor about a year ago and I owe about $40K more on my Knoxville home than it is worth. I’m at the point where I just want to be done with the situation. I’ve considered doing a short sale on my Knoxville home, but am afraid it may not be worth the effort. Are Knoxville short sales worth the wait?”
Marc, I’m very sorry to hear about your current situation. It can be terrifying to be underwater on your home and to be unsure of where to turn and what the future holds. As a Knoxville homeowner facing foreclosure, you do have a few alternatives to avoid foreclosure. Read the rest of this entry »
When it comes to doing a Knoxville short sale, there are no guarantees. But for a Knoxville homeowner facing foreclosure, a Knoxville short sale can offer the best way out of a bad situation. In order to give yourself the best chance of completing a short sale, here are a few common mistakes that sellers make while doing a Knoxville short sale and how to avoid them.
Short Sale Mistake #1: Waiting too long to start a short sale.
How This Can Be Avoided: If you find yourself in a situation where foreclosure may be inevitable, it is important to explore you options to avoid foreclosure as soon as you can. Foreclosures happen in Tennessee very quickly, so it is important to start pursing a short sale before it is too late. While it is not impossible to delay or stop foreclosure with a short sale, there are no guarantee that it can always be stopped. Read the rest of this entry »
A Knoxville short sale is one of a few ways to avoid foreclosure on your Knoxville home. But, it is not a one sized fits all solution to avoid foreclosure. If and when you decide to pursue an option to avoid foreclosure on your Knoxville home, the decision is largely personal. Here is how to know if a Knoxville short sale is right for you.
1. You are ineligible to refinance or modify your loan. For many Knoxville homeowners facing foreclosure, the first plan of attack it to try and see if it is possible to save their home. Refinancing or modifying your loan are two options to try and do that. Unfortunately, not everyone is eligible to do this. In this case, a short sale may be a good option to consider to try and avoid foreclosure.
2. Your hardship is a permanent situation. In cases where a homeowner is so underwater or behind on their mortgage, a short sale may be necessary. It can be the best way out of difficult situation and still allow the homeowner to avoid foreclosure their Knoxville. A Knoxville short sale tends to have a better outcome than that of foreclosure, making it a worthwhile alternative to avoid foreclosure. Read the rest of this entry »
In our Ask the Expert Section, we received a question from Jack, he asks, “I started a short sale on my Knoxville home earlier this year. I’m beginning to lose my patience with the situation. I don’t want to go through the foreclosure process, but I’m not sure that a Knoxville short sale will be successful. We’ve been waiting for an answer for months and we keep having to resend things a million times. What happens if I decide to walk away from doing a Knoxville short sale?”
Jack, I’m sorry to hear about your current situation. Knoxville short sales can be very frustrating for exactly that reason. The waiting can feel like it is going on for months with very little or no progress.
As the seller on a Knoxville short sale, you have every right to walk away from the transaction at any time, if you so desire. This can be done at any point throughout the short sale process. Read the rest of this entry »