I get the question from people all the time: short sale or foreclosure, which is the better option?! My knee-jerk reaction is always “Are you kidding? Short sale, of course!” This has been mostly because I was always under the impression that a short sale, although still a ding on your credit, was gentler on the score than a foreclosure.
But according to a recent blog post by FICO Banking Analytics, there is no real difference in the affect a short sale or a foreclosure has on your credit score. Both the impact in points and the time to fully recover is about the same for both events.
This put me in a precarious situation. All this time I had lauded the short sale as vastly superior to foreclosure, largely because of its less adverse affects on credit. So I was forced to do further research into which was the better option. In doing so I learned about benefits of a short sale I wasn’t even aware of, and found that the FICO blog was way off.
Each borrower’s credit situation is different, and the way that a creditor reports a short sale to bureaus is different. The reality is that hundreds of thousands of distressed homeowners who have chosen a short sale have experienced a lesser impact on their credit than those who have chosen foreclosure.
In a short sale, a distressed homeowner may be able to obtain another mortgage sooner than someone who has a foreclosure on his or her record. Also, more and more employers pull credit before hiring a potential employee, and a foreclosure can keep you from getting a job. Some employers pull credit reports on existing employees, and a foreclosure may not bode well in certain industries.
These benefits stacked against the negative aspects of foreclosure, including the embarrassment of public announcement and literally being kicked out of your home, make, in my opinion, short sale the reigning champion.
Now you make the call!
Short Sale Experts, Inc is offering you a FREE Special Report entitled “Making The Right Choice For A Stable Future” which compares and contrasts the pros and cons of a short sale process vs. the painful experience of a foreclosure loss.
As a Certified Distressed Property Expert (CDPE) agent, we are specially trained to help you escape the threat of foreclosure. If you or someone you know is facing foreclosure, contact us for a private consultation. We can help find a solution!
Download it for FREE to educate yourself, then contact us for a free confidential consultation to ensure that you are educated on your options.
• are at risk of losing your home through foreclosure
• missed your last mortgage payment, or are about to do so
• lost your job or suffer from health issues and can’t afford to keep paying
• have a house worth less than when you bought it
• want to move on with life and start fresh?
• feel trapped by your mortgage and have no idea how to get out?
It’s time that you learn the secrets of how savvy homeowners are using short sales to avoid financial ruin.
Download your SPECIAL REPORT now! Simply fill out the form and tell us where to email the E book.