I co-signed a mortgage for $150,000., when my son bought his Town House, Dec. 2007. My credit...
rating is an excellent 790. My son has never missed a mortgage payment, did make about 5 late (about a week) payments in 2.5 years, but is now struggling to pay his bills. What would a Short Sale of approx. $136,000. on his Twn. House, do to my Excellent Credit Rating?
Any time you have a report on your record that indicates that you did not keep up with your side of the agreement to make specific payments of an agreed amount and paid by an agreed time, it will reduce your FICO score. How much... is not something I can answer, but it will be affected on the down side.
You didn't ask but let me add some extra thoughts that may be of help to you. Since you cosigned the mortgage along with your son, you had agreed to make the payments in case he can't. So I would suggest that you have your son sign the deed over to you and then you continue to make the payments. This will save your credit score and it will also save the Town House. Its value will come back in the time your son would live in it. You can also make an agreement with your son that you will sign the deed back to him at the time when he pays you back for the payments you made and demonstrates that he can take over again with future monthly payments.
Why is this important? If you ever find yourself in need of a loan, you will have trouble getting one and/or the rate will be higher for you. So don't allow yourself to get into that predicament.
not to mention the tax liability a short sale creates...check it out
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