HELP!

[Anonymous]

I just paid off approximately $17K in credit card debt.  I have one credit card left which has a small balance that I am paying off now.  Other than that we are debt free.  My last credit score was in the high 500's.  For family reasons my husband and I have to relocate.  We purchased our house about 2 years ago.  We have been advised to do a "short sale" and that it will hit our credit for about 40-50 points.  My questions are, how long before it comes back up enough to qualify for another mortgage if we have no debt?  Should we use the one card we have left?  Is there anything we can do to help it along?  How bad does a "short sale" really look on your credit report?

Thank you ever so much for any and all advice you can give me. 

Laura

[marty56]

I think there are people in the mortgage section who could answer the question about buying a home after a short sale. Also maybe someone will post the score effect of a short sale as well for you. Also the work you did in beoming CC debt free is wonderful and will make a big difference when you go for a new mortgage.

[BungalowMo]

Do you know your scores right now?

Why "must" you do a short sale?  Is your home currently on the market?  Did you have any late pmts on this mtg?  

[Anonymous]

We need to move.  We owe 287,###  and we have had it on the market for almost 2 months as for sale by owner.  Lots of people have looked at it,  but there have been no offers.  We have had 3 different realtors say that we would be lucky to get $275 - $280 for the house.  We have never been late on a payment.

Do you have another suggestion as to what we might do?  I was thinking of trying to get a personal loan for the difference.  Do you think that would be good?

[BungalowMo]

Welllllllllll...as far as the loan, that is a decision that you & your hubby need to discuss & decide upon. 

I don't know anything about short sales, but it sounds like the remaining balance ahows as a negative acct on your reports, right?  It's a way of getting your place sold asap?

[Anonymous]

correct.  The last time i saw my credit score it was in the high 500's.  If it drops 200 - 300 points then it would take me a lifetime to recover, right?  How low can your score go?

[IOBA]

Could you and hubby afford to rent the house out when you move?

[Anonymous]

Laura,

 Dont know if you have made a decision or not but I had someone close to me in the same situation. They had to relocate for employment and sale their house. They had good credit and took out a signature loan for the difference in their short sale. The plus side to taking a personal loan and covering this amount as opposed to the short sale is the personal loan will not hurt your credit. You may lose some points initially for the inquiry and new account but with positive payment history they will come back. This will prevent you from taking a hit from a short sale (I dont know what damage a short sale does) but the personal loan cant hurt. Just make sure you have the means to pay it back and dont let it go bad if you do take a sig loan. But like was stated earlier this is dependent upon you and your husbands personal situations that we know nothing about. Just discuss it and make sure it is what is right for you guys.

Good Luck