Many people are facing tough decisions with the housing market the way it has been the past few years. Thousands of Americans find themselves weighing the options of a short sale versus foreclosure or bankruptcy. Each of these options will impact your credit score, which affects the interest rates of loans for a home in the future. It is important to understand how each of these options will impact your score before you decide how to handle getting out of a mortgage.
Foreclosure and bankruptcy are two ways to get out of a mortgage that you can no longer afford. These two options tend to carry the heaviest penalty to your credit score. Bankruptcy generally leads to a drop in credit score of up to 240 points. This also leaves a bankruptcy mark on your credit history that takes a lot of time to overcome. Foreclosure is another option that carries heavy penalties. It is important to understand that all of these options will have a negative impact on your credit score. Foreclosure usually leads to a drop of about 160 points.
A short sale is an option to consider because it tends to have the smallest impact on credit scores and it is a way to handle the mortgage with dignity. A short sale involves selling the house quickly and at a reduced rate to avoid foreclosure or bankruptcy. I help people review their mortgages and decide which options are best for them. These options include short sale, deed-in-lieu of foreclosure and foreclosure. Each homeowners has rights and options and I help you navigate through them.
Are you thinking about selling your home via a short sale OR are you a buyer considering purchasing a short sale? Get educated first and then sell or buy. Know your options and know your rights.
Thanks for reading this.
Joe Stradcutter
High Pointe Realty
612.516-3456
jstradcutter@gmail.com
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