A short sale does adversely affect your credit, but not as much as a foreclosure.

I would recommend taking a loan out for the difference and paying off the mortgage instead of doing a short sale. Its better for your credit and paying back debt is the "right thing to do".

If one has the ability, paying back what you owe is the best thing to do.

Wed Jun 11 2008, 14:08

Stevie,

I would have to disagree with John's answer to your question.

By the nature of the term, "short sale" the lender is agreeing accept less than the total payoff amount. Anytime there is a settled payoff this reflects poorly on an individual's credit. Also I can't think of any situation where a lender would agree to a short sale unless the borrower is significantly delinquent. And as we all know, late mortgage payments have a serious negative impact on credit.

The short sales I have been involved with have all been on the buyers side, so I haven't had access to the seller's credit. However in all these cases the seller and the seller's realtor both are aware that unless the buyer is able to secure financing, the seller will lose their home to foreclosure.

Hope this helps.

Trey Bowden
Mortgage Lender
Edmond, OK
(405) 340-3277

Wed May 14 2008, 07:32

No it doesnt hurt your credit. Because the lender has to agree with the terms and especially in todays market u could short sale you house and turn around and buy a new one the next day. JOHN TRIM 281.685.0792

Sun Apr 27 2008, 23:47

A short sale does affect your credit score negatively, but it only bruises it versus ruining it like a foreclosure. If everything else is paid and kept up to date it is very easy for someone to purchase a home within the next 2 years. As a Real Estate Professional, Short Sales are very time consuming and can be tricky, you have to deal with lenders wanting it done for free, the owner leaving out information because they do not know that it is important, buyers getting frustrated because they do not understand the process and the time that it's taking, and if you are not familiar with the paperwork you can end up doing circles for a very long time. I hope I gave you the information you were looking for plus some additional insight.

Tue Apr 22 2008, 12:52