Posted on: 12th Jul, 2010 07:01 am
We want to protect our credit rating. We owe 386k in a mortgage and 100k in a HELOC. We will get 485k from the sale of our home (less commission, fees, etc). We can bring money to the table. How does the process work? What is the best way to go about this?
If the difference is only $1k from what you owe vs. the net proceeds of the sale, then for the ease of things it's best for you to bring in the $1k difference yourself, if you have it from your own funds then there you go, but if you don't then I recommend you borrow from family or a credit card you can take a cash advance from. Doing a short sale to cover a $1k difference is not advisable.
If I misunderstood and $485k is the sales price, and not the net amount you will get, then the above advice still applies but you may also want to look into doing a short sale. You don't have to go behind on the mortgage payments to be approved for a short sale. A short sale just adds the comment "Settled for Less Than Full Amount" to the mortgage trade line and most of the time doesn't actually hurt your credit. It's the situation where people go late on the mortgage and then do a short sale which hurts their credit.
If I misunderstood and $485k is the sales price, and not the net amount you will get, then the above advice still applies but you may also want to look into doing a short sale. You don't have to go behind on the mortgage payments to be approved for a short sale. A short sale just adds the comment "Settled for Less Than Full Amount" to the mortgage trade line and most of the time doesn't actually hurt your credit. It's the situation where people go late on the mortgage and then do a short sale which hurts their credit.