Impact of a Short Sale vs. Foreclosure on Your Credit Report

Impact of a Short Sale vs. Foreclosure on Your Credit Report

Many homeowners don’t understand the difference of how a short sale vs. a foreclosure affects their credit.

When you negotiate a short sale, you have the option to negotiate with the lender that there shall be no negative impact reported by them on your credit report. As a result, you should be able to purchase another home within approximately 12 months, providing you have not defaulted on other credit obligations such as credit cards. Many people say, “I don’t want to own a home right now.” My response to that is, “where were you financially 3 years ago?” 3 years ago, did you think you would be in this financial hardship today? Where will you be in 3 more years? Wouldn’t it be horrible if 3 years from now you were ready to start over with a new home and you couldn’t because of a foreclosure? What if you had to wait another 2 years and values jumped?

With a foreclosure, the lender automatically reports this on your credit, which stays there as a negative item for at least seven years, making it difficult for you to qualify to purchase another home during that time period. As a matter of fact, with a foreclosure one currently cannot purchase another home for nearly 5 years.

There is no reason to let your home go to foreclosure and ruin your credit, when you have other options available such as a short sale, mortgage modification, forbearance or a short refinance.

Short Sale Option

Short sales take awhile to get approved, but they can stop your home from going to foreclosure. If you start early enough, your lender will usually hold off scheduling a foreclosure auction sale date while they are negotiating a short sale with you.  Once the sale is approved by the lender, the foreclosure proceeding goes away. You get to walk away owing your lender nothing(in the case of purchase money mortgages), and move on with your life. Your buyer gets to buy a home, and your lender saves time and money by not having to foreclose.  A short sale is the perfect solution when you need to sell your home, and you owe more than it is worth.

The Cameron Team -Short Sale Experts

The Cameron Team are experts at closing short sales in the Scottsdale and Phoenix area as well as the surrounding communities of McDowell Mountain Ranch, DC Ranch, Silverleaf, Grayhawk, Troon, Rio Verde, WindGate Ranch, Desert Highlands, Desert Ridge, Tatum Highlands, Tatum Ranch and the surrounding communities of phoenix.  In fact, we have sold or closed dozens of short sales this year. The secret to our success is experience, knowledge and our dedicated service to our clients. Our goal is to save your home from foreclosure.  We can also help you negotiate a mortgage modification, a forbearance or a short refinance if you want to stay in your home and can afford to make a reduced payment acceptable to you and your lender.    

We want to see you stay in your home and keep another home from going to foreclosure or becoming an REO statistic. That is why we work so hard to help our clients achieve the results they want and need. 

Remember that lenders want to find a solution that works for all parties. If you walk away from your home, and the lender forecloses, and it becomes an REO (real estate owned), they must spend money and time maintaining the home before they sell it to a new buyer. The lender has to worry about vandalism to the home and squatters. They would rather work out a plan for you to keep YOUR home. So don’t ignore the problem. Be proactive in finding the best solution. Odds are in your favor that you will be able to save your home from foreclosure by acting now.

For a FREE packet of information about how to avoid a Foreclosure, go to www.NoForeclosureAZ.com

Or

Are you ready to take advantage of this market? Do you want advanced notice to new bank owned properties before they hit the market? www.ArizonaBankDeals.com see new foreclosure homes before most other agents even know they exist!