Will There Be Any Short Sale Credit Consequences if I Complete a Short Sale on My Home?

Hi my name is Chris Bowers and I am the owner and team leader of the Bowers Team, your Arizona short sale experts. Today I wanted to answer a question that I get from people all the time and it’s one of the biggest concerns of my clients. They usually are wondering what their credit consequences will be. How will their credit be affected when they do a short sale? By the time clients decide to complete a short sale, they usually haven’t been making their payments for some time so they are in default. Just know that when you do a short sale, every 30, 60 or 90 days, your lender is going to be reporting that to the credit bureaus. So you are actually going to be getting hit with late payments so your credit is going to be affected as you are going through the short sale process. Let’s say that you are staying current on your mortgage, you aren’t actually going to have the late payments on there. Let’s say we close on your short sale and you were current the whole way through, when you get to the end of the short sale and the short sale actually closes, the bank most likely is going to put something on your credit report that says that you settled on your mortgage so they know it wasn’t actually paid in full so that might affect your credit also.

I just really wanted to let you know that your credit does get affected when you do a short sale so what you need to do is sit down, look at your situation. Let’s say you are $100,000 underwater on your home loan and you are overwhelmed, you need to weigh out the pros and cons. If you keep your home, you will have a good credit score if you keep paying on time. But at the same time you are going to be carrying a home that might be under water for a long time. I don’t know, maybe that’s the best situation for you. Some of our clients who short sell their properties they will have a lower credit score if they stop making payments but at the same time they are looking at their situation saying they can sell their property and be able to move on and hopefully in the next few years buy a property that they aren’t so under water on.

I just wanted to answer that question for you and yes there are credit consequences when you are doing a short sale. Your credit will be affected but at the same time you want to weigh out your pros and cons. Also think of if you foreclose on your property you will have a lot of credit consequences there as well.

Again, I’m Chris Bowers with the Bowers Team and we are your Arizona short sale experts and we are here to help. Please reach out to us if you are in a situation where you are underwater on your home, you need to sell your property but don’t know how you are going to do it. We would really just like to bring you into our office and set you up on a really good game plan. We’ve been doing short sales for over four years now so we have really seen a lot of different situations so we can probably answer some of the questions that you may have. Give us a call today at 623-266-1939. Thanks and have a good day.

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