fbpx
short sale vs foreclosure

Short Sale vs Foreclosure: Understanding the Differences

If you’re struggling to make your mortgage payments, you may be facing a difficult decision between a short sale and a foreclosure. Understanding the differences between the two options can help you make an informed decision that best suits your needs. Here are a few key differences to consider.

Contents

Short Sale Vs Foreclosure

Impact on Credit Score

A short sale can drop your credit score by 50-150 points, while a foreclosure can drop it by 200-400 points. While a short sale can still have a negative impact on your credit score, it can be less severe than a foreclosure.

Length of Time on Credit Report

A short sale can appear on your credit report for 18-24 months, while a foreclosure can stay on your credit report for 7-10 years. This means that a foreclosure can have a more extended and severe impact on your credit score and your ability to obtain credit in the future.

Time Before Eligible to Buy Again

After a short sale, you may be eligible to buy a new home in as little as 1-2 years, while a foreclosure can prevent you from buying a new home for 5-7 years. This means that a short sale can allow you to start fresh and move on with your life sooner.

Why Choose a Short Sale Over Foreclosure:

A short sale can be a better option than foreclosure for several reasons, including:

  1. Protect Your Credit Score: A short sale can be less damaging to your credit score than a foreclosure, allowing you to recover faster and qualify for a new mortgage sooner.
  2. Avoid Foreclosure: A short sale allows you to sell your home and get out of your mortgage, avoiding foreclosure and the associated fees and issues.
  3. Debt Forgiveness: In some cases, your lender may agree to forgive the remaining balance on your mortgage, allowing you to walk away debt-free.
  4. Qualify for a New Mortgage Sooner: After a short sale, you may be able to qualify for a new mortgage sooner than if you had gone through foreclosure.

Conclusion

If you’re facing foreclosure or are already in the process of foreclosure, a short sale can be a viable option to avoid foreclosure and protect your credit score. Understanding the differences between a short sale vs foreclosure can help you make an informed decision that best suits your needs. Contact Dan Belcher at Short Sale Re for a free consultation to learn more about your options and take control of your financial future today.

Scroll to Top

Download Our Short Sale BluePrint