Short Sale Question

sale questionI am considering doing a short sale, and trying to weigh all of the ramifications and would like some advice or insight. We can afford our mortgage and pay our bills. Unfortunatley, our condo is a one bedroom unit, and I’m expecting in July. With the mortgage, taxes, insurance, homeowners assoc fee, and neighborhood fee, it’s close to $1,700 a month. If we are lucky we could rent it out for $900. Even if we lower the mortgage by a couple hundred dollars, it’s still not really feasible to rent. I really want out because the second hand smoke from our neighbor is out of control, and I don’t want my baby in that environment, plus it’s too small for three people.

We can’t do a traditional sale, we owe $176,00 and they are currently selling for about $110,000. If we do a short sale, how is that going to affect our credit rating. I was told only about 110 points. Is that correct? It’s only in my name, I bought before we got married, will my husband be affected? If anyone has gone through this I would love to hear their insights.

We are trying to do a short sale. The bank is taking forever to process our paperwork. We are current on our mortgage and all bills and was wondering if we stop paying our mortgage if that will help the short sale go faster. The reason we are using for the short sale is that I lost my job a couple of years ago and got a new one where I have to commute to another state. It now is no longer working to commute such a long distance. We owe more than it’s worth, and to rent comes no where near covering our expenses.

My friend told me: “It will affect your credit but I am not sure where you got the 110 points information. If your husband is not in the mortgage then it will not show up in his. Make sure if you do the short sale that it is a non-recourse and the bank does not come back at you for the difference. If the mortgage is strictly in your name and you do the short sale, then only your credit gets dinged and pretty bad. The note below is correct, make sure it is without recourse. BUT, when you go to make another home purchase and IF you put your name on it, expect higher than normal interest rates. The next home would almost have to be in just your husband’s name.” Is that true? Thanks.

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