One of the most common questions homeowners ask is, “Can I have money in savings and still qualify for a short sale?”

The answer depends on your mortgage lender, loan type, investor guidelines, and financial situation. Having savings does not always disqualify you, but it can affect whether your short sale is approved.

Can You Have More Than $5,000 in Savings?

Often, having more than $5,000 in a checking or traditional savings account can create a problem during a short sale review. The mortgage company may decide you have enough available funds to contribute toward the shortage.

In some cases, the lender may deny the short sale. In others, it may require a cash contribution before approving the sale.

The lender may review:

• Checking and savings accounts
• Money market accounts
• Certificates of deposit
• Stocks and liquid investments
• Large or unusual deposits
• Additional real estate
• Other funds that are easily accessible

Retirement accounts are often treated differently from traditional savings, but every lender and mortgage investor has its own guidelines.

Can the Lender Take Your Savings?

The lender cannot simply take money from your bank account. However, it may require you to contribute part of your savings as a condition of approving the short sale.

This is called a cash contribution. The amount may sometimes be reduced, negotiated, or waived depending on your hardship, expenses, loan type, and financial circumstances.

Any required contribution should be clearly listed in the written short sale approval letter before closing.

Should You Move or Hide Money?

No. Never move, hide, transfer, or withdraw money to make your financial situation appear worse.

Mortgage companies usually require recent bank statements and may ask for explanations of large withdrawals, deposits, or transfers. Providing inaccurate financial information can delay the short sale or lead to a denial.

Instead, provide an honest explanation of why the savings are needed. This may include moving expenses, medical bills, taxes, vehicle repairs, future housing costs, or other necessary expenses.

Get Help Before Submitting Your Short Sale

Having money in savings does not always make a short sale impossible, but it can significantly affect the lender’s decision. Your financial package needs to clearly explain your hardship, available assets, monthly expenses, and need for mortgage assistance.

I have specialized in short sales, foreclosure prevention, and loss mitigation since 2012. If you are behind on your mortgage, facing foreclosure, or concerned that your savings may affect your short sale, reach out before making financial decisions.

Jenny Olson-Paden
National Short Sale Help
Call or text: 816 405 4866