Knoxville short sales are good for everyone. Short sales are good for buyers, sellers, and lenders. Read on to find out how Knoxville short sales are win, win, win for everyone involved.
Knoxville short sales are win for sellers because they allow a seller to avoid foreclosure. A short sale allows a seller to avoid the stigma of foreclosure and provides a seller with a better overall outcome. In a short sale, a seller is able to stay in the home until the short sale is complete, oftentimes rent free. This allows a seller time to get back on his or her feet prior to the sale being complete. In addition, a short sale will do far less damage to a seller’s credit than that of foreclosure. Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Josh, he asks, “I’m currently doing a short sale to try and avoid foreclosure on my Knoxville home. My wife got sick 9 months ago and had to stop working, which has made it difficult to keep paying the mortgage on our Knoxville home. I’ve tried to contact my lender about doing a loan modification, but haven’t had any luck. I’m scared a short sale may not be a good option. Are there any risks involved in completing a short sale?”
A Knoxville short sale is done as a last ditch option to avoid foreclosure. As far as the risks involved, there are not guarantees when it comes to doing a short sale, since a short sale is done to make the best out of a bad situation. With that being said, Knoxville short sale tend to have better outcomes than going through foreclosure, which is why they are very much so worth the effort. Read the rest of this entry »
For Knoxville homeowners who faced foreclosure or did a Knoxville short sale, the Mortgage Debt Relief Act was a saving grace. It saved homeowners from having to pay income tax on forgiven debt. Unfortunately, the Mortgage Debt Relief Act expired on December 31st, 2013. So, what does this mean for Knoxville homeowners that have gone through foreclosure this year or completed a Knoxville short sale?
Without the extension of the Mortgage Debt Relief Act prior to the end of the year, any homeowners who went through foreclosure or did a short sale may have to face a hefty tax bill at the end of the year. For example, if you owed $150,00o on your Knoxville home, but sold it for $100,000 in a short sale, the forgiven debt would be $50,000. This would mean you would receive 1099-C from your lender and may have to pay income taxes on the remaining $50,000.
It still remains to be seen whether or not Congress will finally agree on an extension of the Mortgage Debt Relief Act. If it is voted on by the end of the year, any homeowner that went through foreclosure or did a Knoxville short sale will not be required to pay income on the forgiven debt. To qualify, the home must be the primary residence, and can only be up to $1 million for those filing as an individual and $2 million for those filing jointly. While parties on both sides of the aisle have agreed the extension of the Act is necessary, they have not managed to come to an agreement yet. Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Kristy, “I’m six months behind on my Knoxville mortgage. I had to relocate for work and I could not continue to keep paying my rent in Texas and my mortgage payment in Knoxville. Prior to moving, I met with a realtor and I owe about $40K more than my home would likely sell for, so I have opted to do a short sale. We finally have a few interested buyers, but I am nervous because my home is definitely in need of some work. In a Knoxville short sale, who is responsible for paying for repairs?”
In a Knoxville short sale, it is generally understood that the home is sold “as is.” This means that it is not expected that a seller make any repairs to the property and the buyer is aware that they are taking the property in its current condition.
In a Knoxville short sale, a seller is in a financial situation that makes paying their mortgage difficult or altogether impossible. This is why it is understood that a seller would not be responsible to make any repairs to the property. Further more, a seller making repairs to the property could raise some questions with the lender. They would question if a seller has money to make repairs, they may have money to keep paying their Knoxville mortgage. Read the rest of this entry »
If you’ve missed mortgage payments on your Knoxville home, you’re not alone. Many Knoxville homeowners are in a similar situation where they are underwater on their home. If you’re facing foreclosure on your Knoxville home, here are 3 steps to take if you’re behind on your Knoxville mortgage.
First, if you’re behind on your Knoxville mortgage, it can be helpful to seek professional advice from the very beginning. While it may be scary to contact your lender, the sooner you contact them the better. You may be eligible to modify your loan and make your Knoxville mortgage payments more bearable. You could also contact a housing counselor. They can help advise you on what options you may have to avoid foreclosure on your Knoxville home. Housing counselors are a free service through the U.S. Department of Housing and Urban Development. Read the rest of this entry »
In order to successfully complete a Knoxville short sale, homeowners must prove they’ve experienced “financial hardship.” This term is actually one that has been coined by lenders as something a homeowner must prove if they’re doing a short sale. While the term may seem simple enough, for a homeowner facing foreclosure, this term can be a little more difficult to explain. So, what exactly does “financial hardship” mean?
In simple terms, financial hardship is something that changes your life completely. It is something that makes your future uncertain and is something that is not easily fixed. It is something that makes your financial situation stressful and altogether overwhelming. It is a financial struggle that makes paying your bills difficult, if not impossible.
There are many different situations that lenders consider to be financial hardship. Some of those possible reasons for financial hardship include: job loss, relocation, death in the family, divorce, incarceration, reductions in income, illness or injury, among other things. These specific scenarios are situations that make it difficult to pay your mortgage, thus making a Knoxville short sale necessary. Read the rest of this entry »
For any Knoxville homeowner that has done a short sale, it is extremely important that you keep certain documentation after a short sale. For things like filing taxes or applying for a mortgage to buy a new home, it is important that you have certain paperwork on hand. Here is a brief rundown of the paper work you’ll need after completing a Knoxville short sale.
The settlement statement is one important thing to keep after doing a Knoxville short sale. For tax purposes, you’ll need to have a copy of it when you file your taxes. It will also be an important item when you’re applying for a mortgage. Depending on the lender and type of loan, your lender may use the close date to calculate the waiting period that you’re eligible to buy a new home. Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Lyle, “I’m in a tough situation. I lost my job and went through a messy divorce. I can no longer afford to make payments on my Knoxville home and have since then struggled to pay other bills. I racked up a lot of credit card debt during that time, and I know the credit card company has filed a judgement against me that is attached to my Knoxville home. Can I still do a short sale?”
When you sell your Knoxville home, regardless of whether or not it is a short sale, all mortgages and liens must be paid off at closing. If the judgment against you is attached to the property, it will need to be paid off at closing or before closing.
The thing that can be tricky with Knoxville short sales is that lenders will pay certain things, but refuse to pay others. And, not all lenders have a set standard of what they will pay. Lenders are willing to pay your closings costs, realtor commissions, and past due property taxes. Sometimes, they will be willing to pay past due homeowners association dues. Read the rest of this entry »
In our Ask the Expert Section, we recently received a question from Ted, he asks, “I’m doing a short sale on my Knoxville home. I’m concerned that my Knoxville home won’t sell for the price I need it to sell for. It is in need of a new roof and needs some other cosmetic works. How much will I have to sell my home worth in order to walk away from the situation debt free?”
Knoxville short sales can be fickle transactions. It can be very hard to say from the very beginning that your Knoxville home must sell for X in order for your short sale to be approved. It is through months of negotiation that an approved price is agreed upon by all parties involved in the short sale transaction. Read the rest of this entry »
Starting August 16th, Fannie Mae will impose longer wait times for those who have completed a short sale on their Knoxville home. In an announcement made by Fannie Mae made in July, Fannie Mae outlined new wait time requirements homeowners who completing short sale. So, what does this mean for those who have completed a Knoxville shore sale?
In the past, Fannie Mae world allow homeowners to buy a new Knoxville home within 2 years after completing a Knoxville short sale or deed-in-lieu of foreclosure. Any homeowner with a 20% down payments and a credit score of at least 680 would be eligible to buy a home within two years. Unfortunately, as of August 16th that is all changing. Read the rest of this entry »