What's Better For Your Credit, Foreclosure or Short SaleWe've been in this housing crisis for a few years now, since 2007 to be more exact. Almost 16 million people which is equal to 30% of borrowers, owe more on their mortgages than their homes are actually worth. The local Maryland moving specialists learned that on average lenders foreclose on about 2,440 homes every day. This pace has been steady for over a year. So many homeowners are wondering what is the next step they have to take in order to rid themselves of their huge mortgage debts. There's a lot of information out there regarding real estate and how it affects people's credit. Some people also own more than one property that's underwater, making things even more complicated.
Some people are saying that a short sale is seen differently than a foreclosure in terms of credit score. A short sale, the local Maryland mover learned, is seen as a settlement on your credit report which can place in you in a better position in the eyes of a lending company when you'll want to buy a house in the future. The short sale will satisfy your debt. A short sale puts you in control, not the bank. And even if you're current on your payments, you can still do a short sale. You might be able to even buy a property right after the short sale. To be eligible, you have to have never fallen behind 30 days late and the lender does not require you to pay the loan back. Some people have said to get a reported FICO score drop from 50 to 130 points.
If you wanted to buy after going through a foreclosure process, you would have to wait 5 years if the home was your primary residence. Without restrictions, the wait is 7 years. Depending on our credit history, you can have your credit score fall from 105 points to 160 points after a foreclosure. If a prospective employer runs your credit check, your job application can be denied if you have a foreclosure on your record. In the end, you'll have to see what the pros and cons to your personal situation are so that you can make the best decision for you and your family. These days, the words foreclosure and short sale aren't that uncommon.