Short Sale When Current On Mortgage

Paul

LoanSafe Member
Apr 18, 2014
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I lost my job last fall, but remained current on my mortgage throughout my job search. I have found a job half way across the country and want to sell my house. Unfortunately, the local housing market will not support asking a high enough price to pay off the mortgage. I expect the house will probably fetch about $15-20K less than what is owed. It looks to me like it will have to be a short sale. I am willing to sign a note with my lender to pay off whatever the amount not covered by the sale is. How will this affect my credit rating?
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,851
467
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Southern California
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According to the Fair Isaac Corporation (FICO), you can expect to see it drop by 85 to 160 points after a short sale. It can be about the same impact on your credit scores as a foreclosure. The National Association of Realtors says it could drop by anywhere from 85 to 200 points depending on whether you have been paying your mortgage on time and your previous credit score. That is what we have found to be the case here on LoanSafe as well.
 

Paul

LoanSafe Member
Apr 18, 2014
2
0
1
55
So even if I am willing and able to make up the difference between what I owe on my house and what I can get for it, my credit rating will still take a hit?
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,851
467
1,000
49
Southern California
www.loansafe.org
That would still be a short sale. Unless you brought money to closing to make up the deficiency.