Expert: Dick Dennis - 2/24/2008

Question
Do you have to continue to make payments once you put your house for a short sale?

How many points does your credit lower when you do a short sale.

Answer
It is presumed that you are in preliminary steps toward losing your house to foreclosure when you put your house for a short sale, Mike. Your house is listed for sale with a real estate agent and he/she should be announcing that your house is a short sale candidate. Therefore, if I was your agent, I would be advising you to hold off from making your payments.

Also, lenders will not consider doing a short sale with you as long as your are current with your payments. You are not showing a distress situation to the lender. If you are now current with your payments, the best you can do to save money monthly is to lower your listing price, because a potential buyer is going to low-ball you anyway.

As for the points lowered, who knows? Even the most knowledgeable of agents cannot tell you. We can only be general. If your payments are still current chances are that alone will not affect your credit score. But as soon as you fall behind in your payments, you can expect anywhere from 50-100 (or more, depending on what else you are slow on payments) points off your credit scores.

I do wish you well,

Dick Dennis