I am in my 50's and have had perfect A1 credit scores all my life. I made a bad R.E. investment and I am thinking of walking away and not closing. I will default on this mortgage. What will this do to my credit ?
I am not the greatest in the mortgage field but I believe this will more than likely effect your score quite a bit. You say you are thin king of walking away and not closing..is this mortgae just in the beginning process and can you talk with your bank about any of this? Stick around here or check back. Someone mroe knowledgable in the mortgage field is bound to come along and answer this post also.
Hi wilbur
If you do not make any payments towards the real estate investment you have made, it will be reported to the credit bureaus who in turn will list it in your credit report and your credit score will get lowered. If there is a missed mortgage payment of over 30 days, your credit score may get lowered by as much as 100 points. I think that if you have the means to pay off your mortgage, you should pay it off because real estate investment is never a bad investment. If real estate prices have gone down now, it will definitely rise in future.
Assuming the mortgage is already on your credit, the lates/foreclosure will be devastating... Best bet would be to contact the mortgage company, and see if you can surrender it asap, or do a short sale... (negotiate a sales price below value...)
Doc, What exactly is a short sale? It sounds as if the person would have to take a loss. Of course this is a lot better than letting it ruin your credit.
Hi Wilbur
As far as I know, in foreclosure you can lose your home to the creditor. Not only that, under foreclosure, you may need to pay back the difference in the amount of the market price of the house and the outstanding debt amount. Under short sale, you need not pay back the difference in the outstanding debt amount and the market price of your house, but one important fact in short sale is that you must make the creditor agree to short sale which is a very difficult task because no want wants to make loss.
With the markewt the way it is now that could add up to some serious money. Also I have seen homes around here sit on the market for well over a year now so you may be stuck with this home. Consider making a trip down to the lender and sitting down and discussing the options. They would know best how to guide you in this matter.
A short sale is when the borrower and bank negotiate a reduced selling price to help the borrower unload the property, and avoid further deficiencies...
It basically reduces the amount of the loss for both parties...
I am not the greatest in the mortgage field but I believe this will more than likely effect your score quite a bit. You say you are thin king of walking away and not closing..is this mortgae just in the beginning process and can you talk with your bank about any of this? Stick around here or check back. Someone mroe knowledgable in the mortgage field is bound to come along and answer this post also.
Hi wilbur
If you do not make any payments towards the real estate investment you have made, it will be reported to the credit bureaus who in turn will list it in your credit report and your credit score will get lowered. If there is a missed mortgage payment of over 30 days, your credit score may get lowered by as much as 100 points. I think that if you have the means to pay off your mortgage, you should pay it off because real estate investment is never a bad investment. If real estate prices have gone down now, it will definitely rise in future.
Assuming the mortgage is already on your credit, the lates/foreclosure will be devastating... Best bet would be to contact the mortgage company, and see if you can surrender it asap, or do a short sale... (negotiate a sales price below value...)
Doc, What exactly is a short sale? It sounds as if the person would have to take a loss. Of course this is a lot better than letting it ruin your credit.
Hi Wilbur
As far as I know, in foreclosure you can lose your home to the creditor. Not only that, under foreclosure, you may need to pay back the difference in the amount of the market price of the house and the outstanding debt amount. Under short sale, you need not pay back the difference in the outstanding debt amount and the market price of your house, but one important fact in short sale is that you must make the creditor agree to short sale which is a very difficult task because no want wants to make loss.
With the markewt the way it is now that could add up to some serious money. Also I have seen homes around here sit on the market for well over a year now so you may be stuck with this home. Consider making a trip down to the lender and sitting down and discussing the options. They would know best how to guide you in this matter.
A short sale is when the borrower and bank negotiate a reduced selling price to help the borrower unload the property, and avoid further deficiencies...
It basically reduces the amount of the loss for both parties...
So if you are already in the closing process as it appears the poster is then you can not walk away and may have to use this option?