A mortgage short sale occurs when the homeowner sells the dwelling for less than the remaining mortgage balance. It’s also known as a pre-foreclosure sale and it’s a foreclosure alternative. Your mortgage company must agree to the sale.
Watch your credit
The mortgage company receives the sale proceeds and the homeowner may or may not have to pay additional monies. A mortgage short sale will affect your credit score – knocking off between 100 and 160 points and remains on your credit history for seven years.