What impact will a short sale have on my credit score and future home purchasing?
If you have stopped making payments on your mortgage, each month that you do not make a payment will affect your credit score negatively. If your lender reports “Settled” or “Settled for Less than Full Loan Amount” after a short sale, the short sale will be considered a major negative incident. If the lender doesn’t report the short sale as “Settled” or “Settled for Less than Full Loan Amount,” then a short sale will not be considered a major negative incident and will not have the negative impact. If you remain current on your payments during the short sale process, you will not have the added negative impact of the late payments affecting your score. With a short sale, given that all other credit is in good standing, you may qualify to purchase another home in 18-24 months.
