Will A Short Sale Show Up On Your Credit?

Will a Short Sale Show up on Your Credit?

Because I am a Certified Distressed Property Expert, I have families ask me all the time as to whether a short sale will show on credit. The answer is no, but let me go into a little more detail.

Short sales are not something that are reported, and that is because they are arranged differently by the bank. The short sale is actually debt forgiveness, in the lenders eyes, therefore the short sale will not show on credit. So, the term short sale, will not be on your credit report. However, keep in mind that youre not completely out of the woods. Your mortgage will certainly show any late pays that you have, and it should appear that your mortgage is paid as agreed, or is settled. So, again, short sale, will not appear on the credit report.

The short sale not appearing on credit, will also not affect your credit score as deeply as doing a foreclosure. Having slow pay, and a mortgage showing as settled, will only drop your scores about 50 points, whereas a foreclosure will drop your score from 250 to 300 points. In addition, when filling out a mortgage application, or 1003, there isnt a place to mark that you have had a short sale. However, the application does have a spot for you to indicate that you have had a foreclosure.

While a short sale isnt something you will feel proud of, it can help save you the embarrassment of a foreclosure, and somewhat guard your future. With a short sale, it will allow you access to more options down the road, whereas a foreclosure ties your hands almost completely.

Short sales are also tough on your emotionally, but if you can get through it, you will come out stronger on the other side. I dont encourage people letting their homes go, but I want you to understand that there is hope if you have to do this. With so much uncertainly lurking in the economy, it is important to know what options are available to you.

Although we face tough economic times, a short sale is not the end of the world, but a short sale wont be on your credit either. When you think about the end result of doing one, think of your family first to help steer you in the best direction. Only you can make that choice, but it does help to have professional guidance, and a counselor that will work with you to help you sort it all out.

For more information on short sales, and for free information, you can go to www.inlandempireshortsalesresource.com.

by: Mayer Dallal

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