Pacific Northwest Real Estate
Comparing Consequences — Short Sale vs. Foreclosure
It’s difficult to even think about losing your home to foreclosure or having to proceed with a short sale, but in today’s economic climate, more homeowners than ever are facing these difficult choices. Susan Stecher’s team of Real Estate professionals is committed to helping you make the best possible choice for you and your family.
First, it’s important to understand the difference between short sales and foreclosures, and what their consequences can mean for you and your family.
How does a short sale affect my credit?
A short sale (selling the home for less than the homeowner currently owes on the mortgage) is often a more attractive option for homeowners who are struggling to make their payments each month. When homeowners sell their home as a short sale, they usually lose about 50-100 basis points on their credit rating (the only things that show on the credit report are late payments and a “satisfied debt”). Even after slight damage to their credit rating, the sellers can typically buy another home in roughly 2 years at a decent interest rate.
How does a foreclosure affect my credit?
Foreclosures carry much stiffer credit consequences for homeowners (and they last much longer). After a foreclosure, homeowners usually lose 300 or more basis points on their credit score. A foreclosure shows up on the credit report for 10 years — and this usually means that it will take up to 10 years before a borrower can get a good interest rate on a home again. Foreclosures must always be listed on credit applications, affecting your ability to qualify for other types of loans, such as car loans and student loans.
***Susan Stecher is a Certified Distressed Property Expert - CDPE, Specialized Service Provider – FSSR, in Foreclosures, Short Sales and Bank-Owned Properties, a Short Sale & Foreclosure Resource – SFR and a Certified Short-Sale Professional – CSP. Call today for a confidential consultation to determine what your best options are to avoid foreclosure — call direct at (360) 319-4939, or toll-free at (888) 319-4939.