Short Sale Seller's Guide: Is A Variable Rate Loan a Hardship?

Short Sale Seller's Guide: Is a Variable Rate Loan a Hardship?

Copyright (c) 2010, Deanna & Jim's GOLD Team, RE/MAX Olympic

     Getting a short sale, deed in lieu of foreclosure, or loan modification approved requires that the homeowner document the existence of a recognized financial hardship.

    There are many well documented legitimate hardships. Usually they involve changes in employment, income, expenses, household membership, or medical situations.

    If a homeowner has a variable rate or indexed loan and it is about to begin indexing or has begun indexing AND the payment is going up substantially that may very well be a legitimate hardship.

    Simply having a variable rate loan that has not gone up or will not go up at current interest rates is not a hardship.  You may not sleep as well at night knowing that at some future time if the interest rates have increased above the rates when you bought that your loan might start costing you a lot more.  It has to have started costing you a lot more now.

    As always homeowners involved in short sales should use the services of a Certified Distressed Property Expert with strong credentials and deep local experience.

(Deanna & Jim's GOLD Team has handled over 500 northern Virginia residential real estate transactions in the last 10 years. We have MBA, MSE, MA, CDPE, and Associate Broker credentials.)