Short Sale and Foreclosure, Myth and Reality
When deciding the best option for you (Foreclosure vs. Short Sale) there are things that should be considered:
1. Do I plan on purchasing a new home in the future? (You may qualify for a new mortgage as soon as 2-years from the settlement of a short sale…Foreclosure is much longer and is harder on your credit score. It generally takes more time for your credit score to rebound after a foreclosure)
2. Does my employer require me to maintain a security clearance as a condition of my employment? If you work in public safety or the military and need a security clearance as a condition of your employment…Guess What? You can not obtain or maintain a security clearance with a foreclosure on your credit.
3. Do I work in the financial sector and is a good credit rating required as a condition of my employment? A foreclosure could plummet your credit score hundreds of points and could take years for your score to rebound. With a short sale, only late pays are reported and the effects on your actual score are generally 50-100 points and will rebound as soon as these late payments start to age.
4. Can I afford to pay a deficiency judgment if the lender decides to pursue this? Lenders retain the right to file a deficiency judgment if your house goes to foreclosure. They may pursue a deficiency for the difference between what you owed them and what they received from the sale of the home plus legal fees, back taxes, maintenance etc. With a short sale, the release from any deficiency judgment can be negotiated as a condition of the short sale.
5. Do I have a financial hardship that would allow me to qualify for a short sale? Not everyone can short sale their home. A loss of equity in the home does not qualify someone there must be a documented hardship such as: Death of a spouse, incarceration, disability, loss of employment, hospitalization etc.
If you think you may qualify for a short sale or would like more information regarding Foreclosures vs. Short Sales, please call me today for a free, no-obligation consultation.
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