you've fallen behind on your mortgage, if your home is currently underwater or
if you don’t foresee being able to continue making payments on your home, then
two options you may consider are foreclosure or a short sale. While both of
these can have a negative effect on your credit score, they both act
differently. Here’s a closer look at each option and how they can impact your
Foreclosure occurs when you've defaulted on your mortgage loan and the bank reclaims possession of your home. ·
The bad: Foreclosure takes a heavy
toll on your credit score and will stay on a credit report for up to 7 years.
It’s estimated that a score can be docked by as many as 400 points after a
foreclosure – but that’s not the worst part about it. The worst part is that
you may not be eligible to purchase another home or qualify for a loan for many
years. You can’t even repair credit or enact credit repair strategies
when you’re carrying the weight of a foreclosure on your report.·
The good: Foreclosure allows you to
walk away from their homes, which is valuable if your current mortgage is higher
than the home’s value.
Short sale - A short sale is an agreement with
the bank that you’ll sell your home for less than what you owe on it in the
event that you can no longer make payments as-is:
The bad: Your credit score will
still take a hit - from 50 up to 130 points in some cases. And although credit
bureaus don’t show “short sale” on a report, it may still identify that you
either settled for less or paid in full for less on a report, which can
jeopardize future loan opportunities.·
The good: You – and not the bank –
control the sale. It’s also a more responsible way of walking away from your
home and being able to qualify to buy another home immediately, in some
circumstances. However, if you've fallen behind on payments, it may be at least
3 years before you can qualify for an FHA loan. The Better: You may even qualify to
get paid thousands for relocation assistance through the Home Affordable Foreclosure Alternative program. Give me a call for more
information. I am part of
a national network of investors and consultants that specializes in short sales
using advanced, non-traditional, real estate techniques that are squarely
focused on the client. I would love to have a conversation with you so that I
may understand your specific situation and work together to find a solution
that best allows you to achieve your goals. Together we can come up with a
targeted solution that helps you.
Blog submitted by: Ron Cooks of The Real Estate Market
Place – Servicing the Greater Fort Hood area which includes: Killeen, Harker
Heights, Temple, Belton, Copperas Cove and Nolanville. Feel free to call if you
have any questions regarding Central Texas Real Estate.
Author:Ron Cooks Phone: 254-702-0064 Dated: December 8th 2014 Views: 1,417 About Ron: I’m a retired Army Warrant Officer that served our nation for 25 years. I was born and reared in ...
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"I chose to work with The Real Estate Market Place because I knew Chip would explain everything to me in the simple terms. He always answered my questions. I was kept up to date on y home status and I was very impressed with the personal service I received from TREMP throughout the selling process. Everything went very well and I received accurate and correct information. I felt they all worked in my best interest.