Community Leader
Senior Contributor
StartingOver10
Posts: 4,522
Registered: ‎03-06-2010
Re: Short Sale a house with up-to-date payment
[ Edited ]

laronda134 wrote:

I think u acutally have to try to sell your house first? I may be wrong though.


No. You don't have to try to sell your home first.  A short sale is where the market value of the property is less than the outstanding mortgage(s) and other liens that may be on the property. So you are asking the bank to accept a short payoff on the mortgage in order to sell the house. Most people ask for both the release of lien and the release of debt. It is up to the lender/servicer to decide if they will accept the short sale and under what terms they will accept it.

As to whether you have to be in arrears, it depends upon the investor that owns your mortgage. Some investors require you to be arrears and others don't; but in order to get your short sale approved you would need to have a hardship. If you are looking to move or transfer because your job transferred, that is also considered a hardship.

 

As to affecting your credit, your short sale will negatively impact your credit, even if you are current on your payments. However the credit recovery from a short sale seems to be much quicker than it is from a foreclosure.