What works for my credit - Foreclosure or Short Sale?

In very simple words, foreclosure is nothing but a tragedy.

It can hack your credit ratings to pieces. A foreclosure can take off up to 250 – 300 points from your credit score. That will typically affect your score for three years. If you lose your home to a foreclosure, you will not be eligible for a Fannie Mae backed loan for five years! And, that’s not it. Any loans with a mortgage company in the future may also be affected.

So what is the way out?

A short sale shows you a way out of this mess and does not affect your credit history! In a short sale, you do not pay back all the money you took from the lender. He agrees to give you a discount on the initial amount. Even though you are not paying off the whole amount, it does not reflect badly on your credit rating. Technically, the payment is considered full and final settlement. You can make a fresh start in two years.

Basic differences at a glance

Still confused which is a better option? Let us look at the basic differences between foreclosure and short sale.
1. A short sale is less damaging t your credit report as it shows up only for two years. A foreclosure on your property can land a huge blow to your credit rating, one that may not be easy to recover from.
2. A foreclosure can seriously jeopardize your plans of buying a house in the future. Not only that. You may find yourself hard pressed for choices if you want to do something simple like renting an accommodation.
3. The chapter is hardly closed after a foreclosure. Most banks are notorious for hiring collection agencies that are adept at recovering money, by hook or by crook. That is not the case in a short sale.

The Winner is … Short Sales!

Undoubtedly, a short sale is a better financial decision than a foreclosure. Look at the benefits. It does not mess up your credit score so badly; it is not a challenge to security clearance or employment; and you are eligible for a Fanny Mae backed mortgage after only two years.

Where do we come in?

If you are contemplating a foreclosure or short sale, get in touch with us. We have made it our business to negotiate loan restructurings and we will be able to get you the best deal from your lender. We have a reputation of being able to stop foreclosures when others had given up hope. We are great at what we do and we are sure that we will be able to handle all your queries. Do not wait until the last moment. Pick up that phone and call us today.