Falling Short? Know your mortgage type and the guidelines!

It is important to know what type of mortgage you have so that you know what to expect.  The guide lines varies depending on the type of mortgage you have.

This information is so valuable to you to know what type of mortgage and what the guidelines are if there are any set guidelines.  There is a definite advantage to know what is expected of you, so when you get offers you will pretty much know if it will be approved or not. 

Below is some information on each type of mortgage, know your type and the guidelines:

FHA- Insured Mortgages:  HUD has clear guidelines for reviewing short-payoff requests. As long as you meet the criteria, your request will be approved. The basic guidelines for approval are as follows:

• The property is your primary property.  You must live in the property
• The reason for the default on the mortgage must be unavoidable, involuntary, or beyond your control - a hardship
• The house must appraise for at least 70% of the unpaid principal balance
• The contract price must be at least 95% of HUD's appraised value
• The net amount to your lender, after all closing expenses are paid, must be at least 87% of HUD's appraised value.

After your lender receives all of the written documentation from you, they will have the house appraised.

VA- Guaranteed Mortgages:  Unlike HUD, the VA has set no guidelines for reviewing short payoff requests. Rather, they conduct their own analysis to determine if they would lose less money by completing the foreclosure or allowing you to sell the house.

Conventional Mortgages:  There are no guidelines available for reviewing short payoff requests on conventional mortgages. Conventional loans usually have an investor such as Fannie Mae or Freddie Mac and private mortgage insurance. All the parties to your mortgage (the lender, the investor, and the private mortgage insurer) must approve your short payoff request. This process takes time, so prepare the buyers to wait about 60 days from the contract date until closing.

Short-payoff requests is akin to an art form. Each one is different and the parties to the contract must bring the following qualities o the transaction: patience, persistence, knowledge, experience and creativity.

The more liens on the property, the more difficult it is to complete the short payoffs.

For free market evaluation of your home visit http://www.motheranddaughterrealty.com/

Check out my Mother and Daughter Blog for other tips for Sellers and Buyers. I work with my daughter as the Mother and Daughter Real Estate Team and we also focus in Short Sales and the Pre-Foreclosure process.  Our consultations are free.  Our aggressive marketing plan includes progressive online listing advertising.  If you are thinking of selling or buying a home in Northern California: Central Valley (San Joaquin/Stanislaus Counties), East Bay (Alameda, Contra Costa Counties) and would like a free Home Seller or Home Buyer Handbook, please call us at Perfect Financial Solutions 866-750-8282 or direct 510-284-7721 or email at brooksrm2042@aol.com