Credit Hit

mint · Joined: 23 Aug 2009 Posts: 1 0.00 Dollars($)

We bought a house in MI. Then I moved for my job and we could not sell it. We tried for several years, but no offers, so we rented it, while buying and living in a home in VA. Recently, our MI tenants skipped out, and I have been carrying both mortgages for some months. Can't anymore. I have just submitted papers to the mortgage company petitioning for a short sale. I have heard about deed in lieu. At this point, I just have to get out from under this as I need to focus on the house we live in. What will the effect on our credit be for a short sale? For a deed in lieu? Which on is more damaging

jameshogg · Posted: Mon Aug 24, 2009 12:21 am Post subject:

Hi mint,

A short sale will lower your credit score by 80-100 points whereas a deed in lieu will lower your credit score by 250 points. Moreover, both of them would remain on your credit score for 7 years like any other negative item. Check out a previous discussion on this topic from the given page:
Deed in lieu vs short sale: Which is better for your credit?

Thanks

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