Fairfax Short Sales: Avoid this mistake on your financial statement

Fairfax VA -When you are completing a Fairfax VA short sale, one of the documents that your lender will ask for will likely be a financial statement.  Don’t make the mistake of not including all of your monthly expenses and total debt owed when submitting this statement.

Even if you are behind on payments, I recommend you include the debt and the monthly payment.  You should also include anything that you pay for each month.

You should also include education, groceries and credit cards, especially if they are behind six months.  While this may seem trivial,  it can have big, long term consequences.

Here’s why.

If you do not include these costs, you  could be liable for income taxes on the loss. You can be liable for income taxes when short selling a house that you don’t live in.

Some experts insist that income taxes can be avoided. But how?

By showing that you were “financially insolvent.”  This means that all of your assets are worth less than your total debt.

Technically you are considered  insolvent if your house, car or personal possessions  are worth $300,000, but you owe $380,000.

I strongly recommend that you talk to a qualified tax professional before making any financial decisions. I am simply telling you what I’ve seen and learned from experience.

Here is the other reason you want to avoid this mistake. Many short sale guidelines state that a short sale can only be approved when you can no longer afford a property.

This is the case for VA Short Sales, FHA Short Sales, Fannie Mae Short Sales, and Freddie Mac Short Sales. Fannie Mae & Freddie Mac also  recently changed their deficiency guidelines.

They state that they will completely release the debt if you are short selling and have a legitimate hardship.

In the event that you do not have a legitimate hardship, then they may pursue you for the loss.

The banks consider a legitimate hardship when you cannot afford your house payment.

Thus, by omitting a couple of bills to your financials, you could be tipping the scale where you could afford the house. In that case, Fannie or Freddie might pursue you for the loss.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny.

Thanks for reading this,

Thierry Roche

Thierry is a Real Estate Agent at RE/MAX Premier, and Host of Talk Radio’s, ‘Inside Real Estate’

Phone: (703) 322-0600.

Thierry@ThierryRoche.com

Thierry is an advocate for Homeowners in Distress. Thierry has made it his personal mission to help as many people as possible avoid foreclosure and keep their home.

Thierry Roche specializes in loan modifications and short sales in Fairfax Virginia. Fairfax Loan Modification Help. Fairfax Short Sales. Fairfax Short Sale Realtor. Fairfax County Short Sale Realtor. Fairfax VA Short Sales. Fairfax Realtor.

Copyright 2011 Inside Real Estate, LLC. All Rights Reserved.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Roche’s personal views and do not reflect the views of RE/MAX Premier. This information is provided as a courtesy to our viewers to help them make informed decisions.

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