FINALLY sold a house at a loss. Credit impact? (loan, heloc, credit card)

[jtjmom]

We have been making double payments, etc. on our old and new houses since we were relocated by his company last October. Finally, the house is sold. Of COURSE we took a real beating on it, but at least it's gone! Eight years of payments, several thousands worth of home improvements, and we still didn't get out of it what was owed. Oh, well. That we can live with. Just glad to have it gone!

My real question is this: Does anyone know if paying off a mortgage via sale of the property will significantly, if at all, impact one's credit score? We didn't use a short sale, but paid of the leftover principle in cash. I can't imagine that it would possibly hurt us, but hubby thinks it will lift this huge burden of credit, and I just don't think it will make that much of a difference. We are also paying off 7 credit cards and an unsecured loan around the ame time here, and my concern is that we're going to look like a disaster waiting to happen on our credit report... Does anyone have any ideas?

Mods: I wasn't sure if this post belongs in Mortgages or in Finance, so I guess put it where it belongs... ??

Thanks for your input!

~D

[pghquest]

The reason why the loan was paid off, (be it a sale, or just a pay off) does not matter, what does is that the loan was paid off, the period of time that you had the loan, and how many payments you missed, if any, during the period you had the loan.

If you paid the loss by writing a check at the closing, the bank received 100% of what they were owed and it will be positive on your credit report.

It will not instantly raise the credit score, but the debt ratio will be substantially lower so it will impact your score much greater as you go down the line and pay off your other debts

[MomOfToo]

I say run your credit in a few months to see if it had any impact.

[heydade]

it will increase your score a little bit. You can actually expect a small drop in the beginning believe it or not.

[ST CRoix To Seattle]

won't increase your score,we paid off a large amount with a recent sale with a 740 before paying off,it did not change it one point up or down..

[jtjmom]

Thanks for the info, everyone!

[pghquest]

I recently paid off a HELOC, and even though the line is still open, my credit score jumped about 50 points.. Most likely though it jumped so much because it shows that the % of my HELOC I use dropped..