Qualifications For A Pennsylvania Short Sale

There are many misconceptions of what qualifies a Pennsylvania homeowner for a short sale which has left many residents confused.  Following is an example of the three major items that most lenders look for to see if you qualify.

1. Financial Hardship

The number one item the bank looks at is to see if you have a financial hardship.  A financial hardship is an issue that has or will cause you to miss payments.

Examples of hardships can be:

• Job loss
• Job relocation
• Too much debt
• Family illness
• Divorce
• Underemployment

2. Monthly Shortfall

Every mortgage company will want to see if you can afford your mortgage.  This will be demonstrated in a financial worksheet that you will need to fill out during the process.

The shortfall equation is:  Total Monthly Income - Total Monthly Expense = Monthly Shortfall

3. Insolvency

Insolvency means that you do not have a way to pay down your mortgage.  The mortgage company wants to see that you owe more than you have in cash.

Please note:  You do not have to be completely broke.  Retirement plans and custodial accounts as well as money in the bank for living expenses are acceptable.

To go through these issues it is recommended that you sit down with a certified agent and examine each one in detail.  

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