Listing your home for short sale is not as complicated as you may think. This is Part 3 of a Series on Listing Your Home for Short Sale. If you missed the prior posts in the series, please click the links below to make sure you aren't missing important steps.
Once you've qualified that your mortgage holder is willing to do a short sale, and hired your listing agent, it is time to gather financial information. This is just like what you went through when you first applied for the mortgage, so I hope your files are organized and easy to find. If not, get ready to explore.
All mortgage holders requirements are different, but they all stem from the basics below:
- Two Years of Tax Returns
- Two Years of W2's
- Proof of Income for the Last Two Months (paystubs)
- Two Month of Bank Statements
- Monthly Income/Expense Sheet (household budget)
Some mortgage holders requirements will not be so extensive. For instance, somemay only require a signed and dated budget and one month of paystubs. It is my experience that you can never have too much information at your finger tips. Send the banks only what they asking for, but be ready to comply with updating this information periodically, or giving them additional information they may not have requested up front.
You may be asked to show investment statements along with bank statements. Remember, when you took out your loan, you showed these very same investment statements to show reserves. Reserves are are required for loan approval so that the lender knows you have somewhere from which you can draw money if things get tough. Well, in a short sale, times are tough, so they may want to know what happened to those investments.
Put your loan number(s) on each page you send to the bank. I find it particularly useful to print labels (30 per page) with the loan numbers on them. Then placing the loan numbers on every page you fax to the mortgage holder is as easy as peeling and sticking.
I find that some clients prefer to have me send their financial information for them. Others prefer the privacy of doing it themselves. If you are going the latter route, make notes of dates and times that you send faxes to the mortgage holder (s). Printing fax confirmation pages is a great piece of information for your file.
Accompanying your financial information, you will also need a Hardship Letter. We'll cover that in our next post of this series: