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What happens when you sell your house for less than you owe?

Do you pay on the remainder like a loan or do you have to pay it all back in a big chunk?

Answer Question
 
dreamhopefaith

Asked by dreamhopefaith at 8:45 PM on Sep. 18, 2010 in Home & Garden

Level 3 (18 Credits)
Answers (3)
  • I think you have to keep paying on the remainder of the loan. Don't quote me on that.
    louise2

    Answer by louise2 at 8:48 PM on Sep. 18, 2010

  • In real estate, a short sale is when a bank or mortgage lender agrees to discount a balance due to an economic hardship on the part of the mortgagor. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower's financial situation.

    A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, the advantages include avoidance of having a foreclosure.
    ambr2006

    Answer by ambr2006 at 8:49 PM on Sep. 18, 2010

  • In other words, you will be responsible for any amount of the mortgage left over.
    ambr2006

    Answer by ambr2006 at 8:50 PM on Sep. 18, 2010

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