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If your monthly mortgage payment is greater than 31% of your gross monthly income, your loan is deemed “unaffordable” and you have a valid hardship to short sale your home! So, gather your mortgage statement. Make sure you add together all you pay: principal, interest, taxes, insurance, and Home Owner Association fees (if applicable). Add those together- that’s your monthly mortgage payment (let’s call that A). Then, gather all the paystubs for those on the loan for one month. If one spouse is on the loan, but not the other, add the income of only the spouse on the loan. Find the GROSS income for the month (not the net- the amount on the check, the gross, before they take out taxes), and add them together to have one amount (we’ll call this B). When you divide A by B, you will get a number that is less than 1. It will look something like this: 0.37543 (we’ll call this C). Then, input this into your calculator:

A / B = C

If C is greater than 0.31, YOUR LOAN IS CONSIDERED UNAFFORDABLE!

This is a valid hardship that will qualify you for a short sale. If your number is less than 0.31, but you still have a hardship (like loss of income, employment, medical, family, etc.), you can still qualify for a short sale.