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Short sale |
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Wthat is a short sale? |
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When you owe more on a mortgage than your property is worth, and you need to move, sometimes a lender will agree to accept whatever you can get on the open market, and forgive the rest of the loan. THat's known as a short sale. It's much better on your credit record than a foreclosure would have been. And the IRS doesn't tax you on the unpaid balance (which they used to regard as taxable income.)
First, though, you have to get your lender's approval. Often they want proof that you don't have other assets you could use to repay the shortfall after you sell your property. And they reserve the right to approve or disapprove of any offer you want to accept for your place, so it can be a cumbersome procedure getting a sale. |
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Edith
Originally published on August 31, 2008 |
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