Mortgage Trouble? How a Livonia Short Sale Can Help

Most Livonia homeowners don’t get into a mortgage with the intent of defaulting on it. But a loan that huge is a long-term process and a lot can happen along the way.  Maybe your original mortgage was sold out to another company with higher interest rates, your financial situation changed, or any of a number of other circumstances occurred causing you to end up in mortgage trouble.

Whatever the case may be, you want out of your mess and you want out soon.  This is where a Livonia short sale can be the answer to your needs.

A Livonia short sale is when the homeowner sells their property for less than what they owe on their mortgage.  It’s usually the last result and is an alternative to foreclosure. This is always a stressful situation, but the following steps can help you streamline the process.

1. Attempt a loan modification program before you decide on a short sale.

There are many programs out there, including federal programs like the Home Affordable Modification Program, where you can work with your lender to come up with an affordable new payment schedule.  You will have a trial period where you will have to show that you can meet the new terms, after which your new payment will continue.  If this is not an option, then you need to consider a Livonia short sale.

2. Have a serious talk with your lender.

A big mistake many borrowers make is in deciding not to make their monthly payments without talking to the mortgage company.  In a Livonia short sale, you are selling for less than you owe and therefore your lender has to agree to the amount of sale. For this to happen you will have to fill out paperwork, including a hardship form, to prove that you are, in fact, having financial difficulties.

3.  Work with pros.  

The Livonia short sale process can get complicated, so having someone who knows what they are doing to guide you through it is necessary.  If you are looking for a Livonia short sale buyer, we can help. Our team specializes in working with distressed Livonia homeowners. We can offer you cash for your home, helping you get out from underneath your home ASAP.  

If you are interested in learning more about how we can help you with your Livonia short sale, call us today.

4. Getting approval.  

The only difference between a traditional sale and a Livonia short sale is that once a potential buyer makes an offer, the offer has to go through your lender for approval.  At this time, any further negotiations will happen between your lender and the buyer, without need for your input.

5.  Sign the papers and move forward.  

Once your lender puts final approval on the sale, it operates like a fairly normal closing.  All of the buyer’s funds that are used to purchase your Livonia home go to the lender and your mortgage is considered to be forgiven.  

What Happens Next?

The stress of owning that hefty mortgage is off of your shoulders. But you can expect an impact to show up at tax time.  The IRS treats the amount of debt that was forgiven as taxable income, so you will likely have to pay taxes on it. In addition, your credit may decrease since you, in essence, defaulted on your original agreement with the mortgage lender.  

However, through a Livonia short sale you can stay in your home up until the closing. On top of this, you no longer have a debt hanging over your head.  A Livonia short sale also looks better than a foreclosure to lenders. So you can purchase a new home, should you choose to, typically after four years pass.