Can I short sell if I'm still paying my mortgage?
It's a question asked quite frequently by people thinking that a short sale might be the best option for their housing situation.
There's a myth circulating that a bank will not entertain, let alone approve, a short sale if the homeowner is not behind on their payments. It's simply not true.
The answer is yes, you can short sale (assuming you have the hardship and other qualifying factors), if you are still paying your mortgage.
In fact, we strongly recommend keeping current on your payment for as long as you can and if possible, through the end of the sale.
Why?
One huge benefit is the fact that you can qualify for an FHA loan and buy another house immediately after your short sale closes. If you miss even one payment along the way, you eliminate this option for yourself.
Another great reason to stay current with your mortgage is your credit score. The short sale itself isn't the most damaging part; it's the missed payments that affects your credit the most. Each time you miss a payment, your credit gets dinged even further. Keeping up on your payments is a great way to salvage your credit. And salvaging your credit is a huge factor in recovering from the short sale and getting your life going again, post short sale.
Bottom line: if at all possible, we strongly suggest you keep paying your mortgage. It will do nothing but help you, especially after the short sale process.
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