How can I protect my credit after my husband goes through a short sale?
Two years ago my husband bought our condo. The condo is only in his name because at the time I was going through a career change and thought my lack of an income would hurt our chances with the loan. That was actually a blessing in disguise. Because of our interest rate adjusting we will not be able to afford the payments. The bank will not approve us for a loan modification because to them having $50 left over at the end of the month is good enough! So we will be doing a short sale. Since the loan is solely in my husbands name, i believe only his credit will be affected. But we have joint bank accounts and credit cards. Do I need to separate our finances so that I will not be hit on my credit score? Because we need my credit score to rent out an apartment. I live in CA, which is a community property state. I’m not worried about taking on his bills because we are together and are doing this together. I just want to make sure that my credit score stays intact so that I can rent an apartment for us. Since I do live in a community property state will that affect my credit score?
Do I even need to worry about my credit score being damaged because my name is not on the loan, but I am his wife, does his bills equal my bills? I’m so confused. Sorry if it was a little long. Any advise is appreciated. Thank you!
Thank you SPIFIMAN1. I don’t think the lender will "go after" us becasue as I understood it, a short sale is an agreement between the lender and us. So we will need to have an approved short sale before we go any further. Thank you very much!
Your credit score will not be affected at all.
On the other hand since California is a community property State you are just as responsible for the repayment of this loan as your husband is.
If you lender comes after you in court separating your your finances will not help. If they do and get a judgment this will show on your credit but by that time you should have already rented a apartment.
Good luck.
if you did not sign the NOTE then you should be fine
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I spoke with a lawyer…Voluntary foreclosure could be better because it would only be 1 hit on your credit instead of having to go 180 days past due. You can offer the deed to your house if the bank will take it to prevent the bank from placing a judgement for any amount uncollected at the sale.
http://www.home-lender-loan.info
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Your credit score will not be affected at all.
On the other hand since California is a community property State you are just as responsible for the repayment of this loan as your husband is.
If you lender comes after you in court separating your your finances will not help. If they do and get a judgment this will show on your credit but by that time you should have already rented a apartment.
Good luck.
References :
Finance Manager for over 9-years / 2008 edition Consumer Action Handbook.
Partly it will depend on when everything happens. Your credit cards may not LET you separate your affairs, for one thing, if you jointly acquired the cards.
One suggestion might be to get a rental set up in advance, while your credit is good, just in case.
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