20 March 2011
Short Sale vs Foreclosure
22/03/11 22:43
Many people are wondering what is better for them a short sale or a foreclosure:
SHORT SALES
1) YOU CONTROL THE SALE OF YOUR HOUSE
2) A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed Mortgage after only 2 years.
3) There is declaration or question regarding a short sale on applications.
4) Only late payments on mortgage will show and after sale mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points if all other payments are being made. A short sale’s effect can be as brief as 12 to 18 months.
5) Short sale is not report on a credit history. There is no specific reporting item for ‘short sale’. The loan is typically reported ‘paid in full or settled’.
FORECLOSURE:
1) THE BANK CONTROLS THE SALE OF YOUR HOUSE
2) A homeowner who loses a home to foreclosure is ineligible for Fannie Mae backed mortgage for
a period of 5 years.
3) On any future 1003 application, a prospective borrower will have to answer YES to question C in
Section V111 of the standard 1003 that asks “have you had property foreclosed upon or given title by a Deed in Lieu during the last 7 years?” This will affect you loan rates.
4) FICO scores may be lowered anywhere from 250 to over 300 points. Typically a foreclosure will affect a score for over 3 years.
5) Foreclosure will remain as a public record on a person’s credit history for 10 years or more.
6) May make it hard to lease or rent after a foreclosure.
The next question you might ask yourself is: Do I qualify for a short sale?
Give me a call and let’s find out.
(909) 238-8221
SHORT SALES
1) YOU CONTROL THE SALE OF YOUR HOUSE
2) A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed Mortgage after only 2 years.
3) There is declaration or question regarding a short sale on applications.
4) Only late payments on mortgage will show and after sale mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points if all other payments are being made. A short sale’s effect can be as brief as 12 to 18 months.
5) Short sale is not report on a credit history. There is no specific reporting item for ‘short sale’. The loan is typically reported ‘paid in full or settled’.
FORECLOSURE:
1) THE BANK CONTROLS THE SALE OF YOUR HOUSE
2) A homeowner who loses a home to foreclosure is ineligible for Fannie Mae backed mortgage for
a period of 5 years.
3) On any future 1003 application, a prospective borrower will have to answer YES to question C in
Section V111 of the standard 1003 that asks “have you had property foreclosed upon or given title by a Deed in Lieu during the last 7 years?” This will affect you loan rates.
4) FICO scores may be lowered anywhere from 250 to over 300 points. Typically a foreclosure will affect a score for over 3 years.
5) Foreclosure will remain as a public record on a person’s credit history for 10 years or more.
6) May make it hard to lease or rent after a foreclosure.
The next question you might ask yourself is: Do I qualify for a short sale?
Give me a call and let’s find out.
(909) 238-8221