How Does a Short Sale Affect Your Credit?
When you find yourself in a situation where you’re struggling to make your mortgage payments, the question of foreclosure vs. short sale often comes up. Which is easier? Which will affect my credit more? Which is quicker to bounce back from? It’s extremely important that you understand the repercussions that accompany any large financial decision.
At Boyette, Cummins & Nailos, our biggest recommendation is always to get the facts. Sit down with an experienced short sale attorney and let them get to know your situation. From there, you can make an informed decision that’s right for you, your family, and your home.
What is a short sale?
A short sale is where you sell your home for less than the full amount owed to your lender, with the lender’s permission. While in the past it was required that you be behind on payments, this is often not the case anymore. For the lender to agree, you must be able to prove prolonged financial hardship such as a job loss or illness that makes paying your monthly mortgage payment unfeasible.
What happens to my credit after a short sale?
While both a short sale and a foreclosure lead to you moving out of your home, short sales tend to carry less of a stigma than foreclosures. Both will stay on your credit report for 7 years. As far as your credit history is concerned, the amount of points your score will lower due to a short sale varies depending on several factors. In general, a short sale lowers your credit score slightly less than a foreclosure would.
Working with a local Clermont short sale attorney, formulate a plan to reestablish your good credit standing. It’s vital that you adopt strict, responsible credit habits after a short sale as that is the best way to pull your score back up over time.
If you’d like to learn more about how to proceed after a short sale and want to meet with one of our lawyers, give us a call today at 855-LAW-2020.