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Upside down loan

I'm upside down on my loan...How can I sell it without hurting my credit?
  • March 09 2012 - Phoenix
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Answers (4)

The only way to not bother your credit, at all, is to find someone who will pay cash, over pay and not get an appraisal. Obviously that won't be easy. Other wise your only other option, to sell with out a credit hit, is for you to bring enough cash to the closing table to satisfy the loan by adding your cash to what the buyer will pay thus making the bank happy. Other options are to rent it or stay in it yourself until the market turns around, which could be awhile. Sorry for the bad news.
  • March 09 2012
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Profile picture for SoCal Engr
As far as I know...

#1 - Bring your own money into the transaction to cover the difference between the sale price and balance owed on mortgage.

#2 - Find a buyer who is willing to bring enough cash to the table to cover the full balance owed (over and above what a lender would lend on the actual appraised value).
  • March 09 2012
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It may be possible to short sale with out being in default on your payments. You will most likely have to show a hardship such as having to sell because of moving for work. In this case your credit would show no late payments. However, the short sale itself will probably be a hit to your credit, but might not be significant if no other credit issues.

Most banks will not consider a short sale if not at lease 30 days behind on your loan. If that is the case, you only have be 30 days behind which is not a real significant on credit if only one. If 90 days late that can make big difference to credit.

If you have to sell, I recommend consulting with an attorney and/or tax adviser to discuss the options and impact of those options.

As Tim pointed out, renting may be a good option if you have to move. Especially if rent can cover your payments or at least close so as not to create a hardship for you.
  • March 10 2012
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Another option is to rent your home while you move to a more affordable home. Depending on your home and location, you may be able to rent it for equal to or more than your mortgage to turn a profit while you wait for a better time to sell.
  • March 21 2012
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