What is a Short Sale?

For many facing foreclosure, a short sale can be a great option.  A short sale is when a mortgage lender agrees to receive a payoff on the home for less that what is owed on the property.  There are several financial requirements that must be met in order to qualify for a short sale.  As a Certified Distressed Property Expert, I can help you determine if a short sale is the option for you.

One major advantage of a short sale over a foreclosure is the impact on your credit.  If you foreclose on your home, your credit will be affected by at least 250 points up to a possible 300 points and affect your credit score for 3 years.  With a short sale, your credit will be affected by approximately 50-100 points and affect your score for 12-18 months.  In addition, a short sale will be reported as “paid in full” or “satisfied” on your credit but a foreclosure will be reported as “not paid” and stay on your credit history for up to 10 years.

Additionally, any future loans you take out will be affected by whether you foreclose or utilize a short sale.  With a short sale, your credit will not be questioned but unfortunately with a foreclosure your future loan rate may be affected for 7 years after the foreclosure.

Finally, your employment status can be affected with a foreclosure.  Many employers view employees credit history and make their decision to hire based on their credit.  Since a foreclosure stays on your record for so long, it can affect whether or not you are hired for certain positions. 

If you are facing foreclosure, please think about some of these ramifications and contact me to see if a short sale is right for you.  You can email me at bonnie@mullinaxteam.com anytime!

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