[gleeaikin]

I have a friend who is contemplating a short sale. How much will this affect his credit?

[gunsequalfreedom]

I have a friend who is contemplating a short sale. How much will this affect his credit?

It will be two to three years before he can buy a house again. That's the short direct answer.

But there is a bigger question he should be asking: Why is he concerned about his credit score?

Your friend should vow never to borrow money again, pay cash. Tell him to add up how much interest he pays a month. Just interest. Then have him look at what his lifestyle will be if he had that extra money.

Putting that money (the amount he was paying towards interest) to best use will be his new problem, not a mortgage he can't pay or is now making on a house that will not recover what he owes for at least five years.

Tell him to do the math. It does not add up to do anything but short sale. The credit score gets him nothing but debt and should not even be a consideration. He should read up on short sale and hammer the bank hard.

[DH]

I have a friend who is contemplating a short sale. How much will this affect his credit?

---

Do a short sale and the IRS will eat you up! You walk into the doors of hell when you do so simply because you will then be reported by the lender to the IRS stating the difference of the balance of the note vs the amount already paid...and guess what......it becomes ORDINARY INCOME on that year’s tax return.

Most people are unaware of this little jewel.

[Shannon]

If he does a short sale his credit will be adversely effected for a few years. Seeing as his credit will tank, why even do a short sale? Why not just stop paying the mortgage and stay in the home until the lender finally gets around to booting him out? That could take up to two years especially if he's got no equity.

If he waits it out until the lender finally takes the house back, he then needs to ask for "cash for keys". Cash for keys is when the lender gives the homeowner cash in exchange for the homeowner agreeing to give the house back in good condition without trashing it and selling everything but the paint on the walls. I told a woman about this and she stayed in the house for nearly two years making no payments. The lender then gave her $2500 for "the keys".

As far as her ruined credit, when she went to rent a house she told the rental agent right up front what happened with her credit etc. His reply, "You and everybody else". Her ruined credit made no difference.

[Wiggins]

I should of said 200 grand in equity. I still have the house though. It’s almost paid for. I’m not sure how selling short would affect credit rating. Make sure he or she looks into it with a professional before taking any action.

[Larry Lucido]

Folks always ask me, “How will bankruptcy affect my credit?”

My answer is always: “The same way that dragging your SUV out of a rocky ravine will affect the paint job. Now, would you like the truck out of the ravine, or not?”

[Lexinom]

I don't think FICO really matters anymore. People should fix their debt situations even if it means not paying the mortgage for a few months.

Speaking from personal experience, we've been honest, have made every mortgage payment. The bank still will not help us out with the rate.

So it's getting to the point it's time to play hardball with them.

People should not plan to borrow money any more in the future. The FICO rating is a joke, denigrating as it does honest people. So I think it's best just to assume that credit no longer exists, don't use the services banks and credit card companies offer, and don't participate any longer in the game.

[longtermmemmory]

if the bank does not forgive the deficiency then he is being played for a sucker.