In most cases, the money you receive from selling your house will be used to repay your home equity loan, and so you will no longer have to make payments after the sale.
Will a short sale affect my loan eligibility?
Since short sales damage your credit score, pursuing a home loan after a short sale may be a lengthy process. If you want to buy a home in the future, you'll need to repair your credit to be eligible for the best interest rates and loan programs possible.
What is the downside of a short sale on a home?
For a short sale to close, everyone who is owed money must agree to take less, or possibly no money at all. That makes short sales complex transactions that move slowly and often fall through. If you're a seller, a short sale is likely to damage your credit — but not as badly as a foreclosure.
Can a home equity loan be foreclosed on?
Some borrowers stop paying their HELOC while continuing to pay their primary mortgage. In this case, the HELOC lender may decide to force foreclosure. Primary mortgage lender may receive the lion's share of the foreclosure money.
Do you have to pay off a home equity loan before selling?
Can you sell your house if you have a home equity loan? You don't have to pay off your home equity loan or other liens to list your home for sale. At the sale's closing, creditors holding liens on your home's title will be paid off from the proceeds of the sale.
How long after a short sale can I refinance?
If you were in default on the old mortgage loan at the time of the short sale, then you usually must wait at least three years before applying for another FHA-insured loan.