The next piece is what the terms on the short sale are from the bank. This would include whether or not there will be debt forgiveness and to what extent. The other is how it will be reported on your credit some banks are reporting "paid in full" which would mean it is reported like a regular sale and not a short sale which is reported as "paid in full for less than full balance."
Also, it will depend on who holds the paper on the note or who insures it. An FHA loan has it's own process and terms. A Fannie Mae or Freddie Mac loan also has it's own guidelines under HAFA and you could get $3000k as part off the short sale. You can visit makinghomeaffordable.gov for more information on that program.
Typically, if you are not keeping current with your mortgage, the mortgage lates will affect your credit worse than a short sale. On a side note, you should always try to stay current on your mortgage. Do not let anyone tell you you have to be late to do a short sale. It is not true. You can easily do a short sale and be current with your mortgage. That is one of the top ways to maintain your credit.
As far as buying after a short sale, You can buy again after 2 years with Fannie Mae and FHA. In some cases sooner, but you will want to check with a good lender as the guideliens are always changing.
You can visit my website for more information: njshortsalehelp.helpprogram.com
Hope that helps.
Depending on where the house is located you are short saling and whether or not it is a primary residence, you may or may not be liable for the difference. An accountant can tell you this.
Then, if the debt is forgiven, you may owe the IRS money. Again speak with your accountant.
If you stop paying the mortgage while in the process, you might be able to save some money and some banks will actually pay you to leave the house, too.
So, there are many financial affects a short sale has on you.
Not to dodge the question but each person's financial situation is different. A short sale effects your credit report depending on the condition of your credit at the time of sale. I would be happy to discuss your situtaion with you and discuss whether a short sale is right for you. You can give me a call or we could meet to go over your concerns. Contact me any time.
In the meantime, my short sale blog might provide you some more information about some of the issues regarding short sales. Take a look at http://www.ridgewoodshortsales.com.
Hope to talk to you soon.
Certified Distressed Property Expert