Home Buying in 60143>Question Details

Purple23, Home Buyer in Roselle, IL

how many points go down on your credit when you do a short sale . How long will it take to get a mortgage loan again .?

Asked by Purple23, Roselle, IL Wed Mar 27, 2013

Help the community by answering this question:


The primary negative impact on your credit reporting comes from your missed/delinquent payments, if any, not from the "event" itself (short sale transaction) and there is absolutely no negotiating of that.....the lender will report your missed payments and the credit bureaus will determine how they calculate your scores, period. Generally, if all else is good, it takes 3 years to re-qualify for a mortgage loan, unless there are some extenuating special circumstances. I have heard of 1 lender who will qualify you immediately post short sale if you have NOT missed any payments during the process, but have not actually seen it done.


Lester S.
"Lester the Lister"
CDPE (Certified Distressed Property Expert)
RE/MAX 1st
0 votes Thank Flag Link Wed Mar 27, 2013
It all depends on how you negotiate it. I have seen them where there is no negative reporting and others whose credit score does go down. No 2 are exactly alike because you make it part of your negotiaions. The variables if you are behind on your mortgage and if your other bills are behind. Meet with a local and trusted loan officer who can prequailify you and guide you.
0 votes Thank Flag Link Wed Mar 27, 2013
You can't negotiate the hit on the credit score only the deficiency and maybe with some banks how its reported but must include that verbiage in their standard approval letter. Would love to know of a case where you were able to negotiate how its reported and they actually followed through.
Flag Wed Mar 27, 2013
There is no hard and fast rule for the credit score hit. Speak with a mortgage broker to better understand what the options and timing may be for another loan. The rules are always changing so what the rule is today may not be applicable when you are ready to get back in.

Geoff Ommen
Broker Baird & Warner
0 votes Thank Flag Link Wed Mar 27, 2013
There are many variables involved so there is no exact number but the range can be anywhere from as little as 65 points to 300 or more points. Many people are able to stay current on their mortage and still get approved for a short sale.

You will have to wait at least 2 years after the short sale closing and 3 years if you follow the short sale wih a personal bankruptcy. The preferred method is to do a short sale first and then do the BK.

Keeping all other credit current will mitigate the damage the short sale will have on your overall credit. I had just spoken to a loan originator on this subject.

Of course, this is based on current lending rules. They can change at any time. You can also use a hard money lender but that will require higher downpayments and higher interest rates.
0 votes Thank Flag Link Wed Mar 27, 2013
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