Pros and Cons of Selling Your Tampa Home for Less than You Owe

If you are considering selling your Tampa home for less than you owe, you may want to check out the pros and cons before doing so. There are many homeowners who have decided to do this after finding themselves unable to keep up with their mortgage payments. Extenuating circumstances may cause a hardship – a layoff, a divorce, a death in the family or an illness – and the best solution may be selling your Tampa home for less than you owe.

When you decide to do this it known as a ‘short sale.’ The alternative, which is foreclosure, is not a pleasant thought so if homeowners cannot work out a solution to their financial problems with their lender, this may be worth considering. What are the pros and cons to selling your Tampa home for less than you owe?

A short sale will not stay on your credit record for ten years as the foreclosure will. If you decide to do a short sale, the lender can keep any derogatory marks from being entered on the report. Check into this and see if you can get it in writing so there will not be a problem later if you decide to buy another home.

Proving your financial hardships to your lender will be paramount to their consideration and approval for selling your Tampa home for less than you owe. They will want to see hard proof, such as bank statements, pay stubs and this type of financial paperwork. In addition, if there has been a layoff, medical issues or a loss of income due to divorce, this will be an important factor as well.

Selling your Tampa home for less than you owe can mean you will have to pay higher taxes. A little known fact when it comes to short sales is the difference between the selling price and the mortgage balance can be considered income by the IRS. If you are considering a short sale, make sure you can prove you were insolvent (your debts were more than your assets) before your lender agreed to the sale and this may save you from being required to pay taxes on this amount.

For more information about homeowner assistance programs, please visit our “Find A Local Counselor” page, complete the form and we’ll be happy to assist you further.