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What Can a Short Sale Do to Your Credit?
The real estate market may be rebounding, but many people still find themselves struggling to make the payments on their mortgages. As a result, an increasing number of homeowners are now selling their homes via short sales instead of having their homes go through foreclosure. In fact, in the second quarter of 2012, short sales accounted for 12 percent of nationwide home sales.
Short sales appear attractive to those who are drowning in debt and unable to make payments on mortgages. But you should be aware of a few issues before going the short sale route. A short sale can seriously affect your credit rating. In some cases, a short sale can have as devastating an impact on your credit score as a foreclosure. However, in some situations, those who go through a short sale have their credit ratings drop fewer points than those who opt for foreclosure.
So how do you decide whether to take the short sale approach? A number of facts about your particular situation need to be examined, such as how many payments you have already missed, and how your lender will report the sale. If you have never missed any payments, and have a solid credit history, you may be able to negotiate to have your short sale listed as paid instead of settled. In that event, your credit score may not be negatively affected at all.
A skilled real estate attorney can help you examine the facts of your particular circumstances so that you can make a decision on the best route to take.