I have had everyone from family members to friends short sell their homes recently. For those who haven't experienced this yet the response has been, "Well, at least it doesn't affect their credit score."
My Answer is, "Hell, yes. It does."
Short selling your home will affect your credit score, but its best to just get it over with than drag everything out for months with a foreclosure. You know my stance on foreclosures and not paying your debt. Do whatever you need to in order to pay your bills. You can: rent a room out, get another job, sell stuff . No excuses
The mortgage you received is a legal contract that you agreed to repay the amount you borrowed plus interest. You made the decision. No one else. But if you are not going to do the right thing and repay the loan then a short sale is the next best step.
With a short sale you are allowed to repay less than the amount you borrowed. If you do not live up to your end of the bargain it will hurt your FICO score. A short sale shows on your credit report for 7, count them, 7 years. The term short sale does not show on your credit report as "short sale". It reflects as "settled", which essentially means foreclosure. The impact a short sale or foreclosure will lessen with time.
If you are planning on going through a short sale be sure the rest of your creditors are paid current or even pay off your credit cards with money you are probably no longer putting towards your home. As your FICO score drops because of the short sale your creditors will get nervous and either jack up your interest rate, reduce your credit line, or close your accounts all together.
The last thing you need to have happen next is to have your interest rates sky rocket and cause you to now have credit card payment you can't make. First a foreclosure and next bankruptcy. Not the way to go.
My Answer is, "Hell, yes. It does."
Short selling your home will affect your credit score, but its best to just get it over with than drag everything out for months with a foreclosure. You know my stance on foreclosures and not paying your debt. Do whatever you need to in order to pay your bills. You can: rent a room out, get another job, sell stuff . No excuses
The mortgage you received is a legal contract that you agreed to repay the amount you borrowed plus interest. You made the decision. No one else. But if you are not going to do the right thing and repay the loan then a short sale is the next best step.
With a short sale you are allowed to repay less than the amount you borrowed. If you do not live up to your end of the bargain it will hurt your FICO score. A short sale shows on your credit report for 7, count them, 7 years. The term short sale does not show on your credit report as "short sale". It reflects as "settled", which essentially means foreclosure. The impact a short sale or foreclosure will lessen with time.
If you are planning on going through a short sale be sure the rest of your creditors are paid current or even pay off your credit cards with money you are probably no longer putting towards your home. As your FICO score drops because of the short sale your creditors will get nervous and either jack up your interest rate, reduce your credit line, or close your accounts all together.
The last thing you need to have happen next is to have your interest rates sky rocket and cause you to now have credit card payment you can't make. First a foreclosure and next bankruptcy. Not the way to go.
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