Selling Short While Paying On Time

I’ve touched on this topic before, but it’s worth taking a moment to discuss one of the more prevalent short sale myths that I’m repeatedly asked about – that a short sale wouldn’t be accepted (or even considered) if the borrower were still paying their mortgage on time.

Not true.

We’ve processed many short sales where the borrower was still making their payments. In fact, I can only think of one or two instances where the lender wouldn’t work with the borrower for that reason.

Generally speaking, the hit you’ll take to your credit will be more sever when 60 and 90-day delinquencies start popping up. Without them, you can limit the damage a short sale will do to your credit.

Certainly, I understand the argument that the lender won’t take you seriously – that the urgency isn’t there – if you’re still paying on time every month. And there’s some truth to that, but that hasn’t prevented lenders from working with our clients in the past.

If you can still afford to do so, keep making your payments – at least, until your lender tells you otherwise. If the short sale isn’t accepted, better to be able to say your lender told you to stop paying, as opposed to making the decision on your own…