Short Sale V Foreclosure
With the recent stock market tumble and government debt ceiling increase, people are extremely worried about their homes value.
Unfortunately, some people are faced with a decision that many never want to have to face. Short sale their home or let it foreclose. Before you do this, consider the following ramifications and benefits from short sale or a foreclosure.
When your home goes into foreclosure, it means that you have defaulted on your mortgage payments and the lender has forced you out of your home due to non-payment. A short sale is very different from a foreclosure but many people see them as the same. A short sale is when you sell your home for less than you mortgaged it and the lender takes all the profit from the sale.
A short sale’s benefits far out way the cons and when compared to foreclosure, it’s the best option, if you have an option between the two. A couple of benefits of a short sale are that you are in control of the sale, not the lender. Additionally, your home sale will be handled like any other sale and you won’t have the stigma of foreclosure on your record.
The ramifications from a foreclosure are far more detrimental than most people realize. When your home is foreclosed on, you can’t purchase another home for seven years, no matter what your circumstances are. Also, your credit score will drop anywhere from 150-200 points, or possibly more. Furthermore, the negative credit notation of foreclosure stays on your credit report for seven years as well.
With a short sale, you are immediately able to buy another home. On your credit score it does mark a negative notation but it does not note, “short sale,” instead it will read something along the lines of “paid in full for less than agreed.”
If you want to apply for a loan after a foreclosure, you may find yourself in a bit of trouble because when you apply for a loan, you must disclose if you have been foreclosed upon and if you were foreclosed upon you will be denied.
Usually after a foreclosure, the lender forces you out immediately and if you don’t vacate immediately, they can begin eviction processes. If you short sale your home, it’s like any other sale so you are free to move at the time decided upon.
If you have any questions or want specific information please call The Hacker Law Group @ (661)259-6800 or visit us on the web at http://hackerlawgroup.com/