If We Buy New, then Short Sale on Current House

**cathleen4** · 04-30-2009, 11:16 AM

My question involves a foreclosure in the State of: Ohio.

We live in an old home that still needs a bit of updating (kitchen).
We are already looking at losing about 15-17K on this house; we will not get out of it what we've put into it, and what we owe on it. We've owned the home for 3 years, and do not want to put anymore money into it.
We would like to either buy a new home or build, and are wondering how
bad it would hurt us to go ahead and get the mortgage for a new home, then sell this house for considerably less than what we owe, resulting in a short sale. We may have a few late payments, but on time for the most part. I don't think this falls along the lines of foreclosure, as we've made all of our payments, but want to sell it for less than what we owe. I might be wrong - isn't that a short sale, not a foreclosure, and therefore not as bad for credit?

Thank you for your advice on this.

**aaron** · 04-30-2009, 01:34 PM

You probably won't qualify for a short sale if you own additional real estate. A bank will generally only consider a short sale if you're truly insolvent.