Credit Consequences Of A Short Sale
Are there any credit penalties of a short sale?
-Yes, there are credit penalties with a short sale. Just like any 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 damaging marks with a short sale. However, if you go through the complete foreclosure route you will have a great deal more negative marks because you will probably miss more payments. Furthermore, when you do close a short sale there will be something on your credit report that will state 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 a great deal better off closing a short sale since the marks on your credit will be lots less.
Moreover worth noting, Fanniemae right now has a rule out there that if you complete a short sale you can acquire another house after a two year period. Nevertheless, with a foreclosure you are going to have to put off for five to 7 years before you purchase a property again.
So, while there are negative consequences from completing a short sale, those damaging consequences are far fewer than the consequence that a foreclosure would have on your credit. The short sale is basically a better resolution for the house owner and the bank.
Contact Josh or Sarah to chat about some concerns that you may have concerning your credit and they can help you clearly see the advantages of a short sale to get your finances back on the correct track.
Moreover, check out our other video blog sessions to learn more about the short sale practice and how you can benefit from executing 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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