Question by eripapito: What is a short sale and how long you have to wait to buy another house again?
I heard a short sale in when you can pay or can sell your house for the amount you bought it for… For example I bought my house for 5k and now it cost between 0k to 0k, so it is upside downs for around k. I heard that I can hire a realtor he will sell it for a less amount and the rest the bank will “eat it”. But I have to wait certain years to buy another house again. How many years do I have to wait to buy again?
Best answer:
Answer by Star
A short sale is where a bank/lender (whomever holds the mortgage to your property) is willing to accept less than the amount of your mortgage so that you avoid foreclosure of the property AND the bank will not come after you for the deficiency. However, the difference between the amount owed on the mortgage and the amount of the sale is considered taxable income to YOU (or whoever was on the mortgage).
For example, your mortgage is 5,000 (although, I would think that it should be lower if you’ve made mortgage payments). You can only sell the house for 0,000 so there is a ,000 deficiency. In a short sale, the lender is willing to accept the 0,000 and not go after you for the deficiency.
However, you will owe taxes on the ,000 (you’ll get an IRS 1099 form).
As far as when you can buy again, that depends. I don’t think that any lender would be willing to loan you money since you’ve basically defaulted on the other loan for 5,000. Plus, in order to qualify for a short sale, you have to show that you are financially unable to continue making mortgage payments (and you probably have to be in default / delinquent for several mortgage payments).
Obviously, if you’re financially able to take out another mortgage, it is unlikely that the lender will even allow a short sale.
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