Effects,Short,Sale,Credit,Scor business, insurance Effects of a Short Sale on Credit Score
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Short sale, or selling real estateproperty at lesser prices than the amount owed on the property, isdone by borrowers who are unable to pay the mortgage amount. It isusually a better option than foreclosure, since it affects theborrowers credit score less drastically. Lenders also considerforeclosure as the last option. The go-ahead to short sale has to beprovided by the lender. This is done only after confirming theinability of the borrower to repay the money. Although evident in theform of payment arrears, the confirmation is carried out by the lossmitigation team that seeks documentation of the borrowers incomeand assets. These tips can help borrowers savetheir credit score while opting for a short sale:Work closely with the lender onthe short sale, without missing the mortgage payment. Request your lender to state thesale as paid in fullKeep your lender posted on yourfinancial situation, so that they approve of your short sale.However, if the lender declines the offer, you might have to choosebetween foreclosure or managing the payment and keeping your house.Howa Short Sale Affects Your Credit ScoreThe effect of short sale on the creditscore is lesser than that of a foreclosure. That is, in a short sale,the credit report mirrors only your delinquent mortgage amount (it isadvisable to opt for a short sale without missing your mortgagepayment). Mortgage amount paid through a short sale is shown by thelender as in a redemption position. This changed status anddelinquency although might decrease your credit score, is morefavorable than the adverse impact of a foreclosure. Borrowers canalso request their lenders to not report unfavorably to the creditagencies. Since every situation is unique, it is best to seekprofessional realtor advice before taking any decisions. Short sale also offers advantage interms of buying another home. Homeowners can purchase another homeafter two years of a short sale, according to Fannie Mae guidelines.This is in contrast to the restriction of two to five years, which isapplicable in cases of foreclosure. However, buying a property aftera short sale could be taxing because the seller does not receive anymoney (since the entire proceeds go to the lender). It is recommendedthat one seeks realtor guidance before buying a property after ashort sale. For expert guidance on short sale or foreclosure ofproperty, consult www.floridashortsaleshelp.com.
Effects,Short,Sale,Credit,Scor