Expert: David McArthur - 3/18/2009

Question
Hi David,

I have a rental property that is upside down and my rental income cannot cover my mortgage payments.  I am thinking of doing a short sale on the property, but worried about the impact it will have on my credit score.  

My question is if I continue to make the monthly mortgage payments and end up going through with the short sale, will the hit on my credit be the same as if I stopped making payments right now?  Would it be better just to stop the payments right now if, in the end, the outcome will be the same?

Thank you,

Angela  

Answer
The late pays will do additional damage but the short sale will be much worse.  I would do what is best for your cash flow.  In the end the damage will be within 50 points or so.  You can always take a few simple steps to increase your credit score again when the dust settles.  If you like to learn how visit:
www.financialscoringsolutions.com

Feel free to call me at my direct line if you have a question, i don't mind.

David McArthur
219-718-8566