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Credit Consequences Of A Short Sale
By Vic Hurlstorm | August 5, 2010
Are there any credit penalties of a short sale?
-Yes, there are credit consequences with a short sale. Just like some loan, if you are missing payments on your mortgage you are going to have negative marks on your credit for missing those payments. Now with a short sale, lets say you miss a couple payments. You are going to have negative marks with a short sale. Yet, if you go through the complete foreclosure process you will have lots more negative marks since you will almost certainly miss additional payments. Also, when you do complete a short sale there will be something on your credit report that will declare debt settled or debt settled for a reduced amount. While, if you have a foreclosure on your credit report it is going to say debt not settled or foreclosure or something of that nature. So, you will be much better off closing a short sale because the marks on your credit will be lots less.
Also worth noting, Fanniemae presently has a rule out there that if you close a short sale you can purchase another home after a 2 year period. Yet, with a foreclosure you are going to need to wait for five to 7 years before you obtain a house again.
So, while there are damaging consequences from executing a short sale, those negative penalties are far less than the effect that a foreclosure would have on your credit. The short sale is simply a better resolution for the property owner and the lender.
Contact Josh or Sarah to discuss some questions that you might have concerning your credit and they can help you openly see the advantages of a short sale to get your finances back on the right track.
In addition, check out our additional video blog sessions to find out more about the short sale procedure and how you can benefit from completing a short sale with Josh and Sarah.
Get more help from short sale Realtors, Josh and Sarah, at Short Sale Shift presented by the Short Sale Specialists of Minnesota
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