Should I Short Sell my Orlando Home or Not?
I get numerous questions weekly in regards to whether or not to Short Sell a property in the Orlando area. So, I want to post the latest question I just received and the response that I sent. Perhaps that will help when you are considering short selling your Orlando area property.
Question:
Our hardship is that my husband and I wanted to sell the house and we can’t due to the drop in price. Our mortgage is for $242,000 and our house is currently value at about a third or a fourth of the mortgage we owe. I am still making payments on the house but we do not need the house anymore as we are not living in Florida. Due to the drop in price, we are unable to sell it, but since we do not want to ruin our credit, we are still making payment on the house. Is there a way I could short sale the house, without stop making payments on the house?
We are current in our payments. We pay about $1700 a month, but my loan is 5/1 ARM Interest only. We have had the mortgage for 3 years (Since 7/2006), so until 7/2011, it will be interest only and I do not want to imagine what will happen, once the mortgage changes to a variable rate.
Financially speaking, we can afford the monthly payments for now, but within the next year or so, we will be buying a house in NY and we wont be able to pay 2 houses.
Please advise.
Answer:
One of the main considerations for a short sale is the fact that you can’t afford it. If your monthly debt’s outweigh your monthly income then you should qualify. If they aren’t then they’ll probably say no to it. You did not indicate the lender. You’ll probably want to call them and ask them their advise. Every lender that I’ve dealt with will not consider a short sale if you are current on your payments. They essentially will not accept a short sale if you’re current. again, call your lender and try to find out. My experience is no.
In regards to not wanting to ruin your credit, well if the lender will not accept a short sale if you’re current, then you have no other option. I do not know exactly how it will affect your credit score, my previous clients are telling me between 100 – 200 point drop in score.
However, since a short sale will eventually be settled and sold this will be recorded on your credit score as settled debt for less than full amount. I am hearing that your credit score will probably rebound to it’s current level in as short as 2 years. Also fannie mae says that you can purchase another home after approx. 2 years vs. a foreclosure it’s 5 years.
So, you have to ask yourself, do you want to take a hit for 2 years on your credit score and be done with this property or do you want to hang on to it for the next 10-15 years until such time that the market recovers to a point where you can breakeven. That’s your ultimate question. You decide. Please let me know if I can answer any other questions.
Thanks
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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit http://OrlandoShortSaleExpert.com or www.JerrySellsOrlando.com for your real estate needs. Please give me a call if you have questions about the Orlando and Central Florida real estate market.
P.S. If you are listing your home as a short sale in Orange or Osceola County Florida and Orlando, Windermere, Winter Garden, Kissimmee or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales.
