According to the three nationwide credit bureaus (Equifax, Experian and TransUnion), a short sale may show up on your credit reports as “not paid as agreed,” which means the lender received less than the full loan amount originally agreed upon.
A short sale will blow a hole in your credit score, dropping it as much as 100-150 points, depending on where you started. The higher your credit score, the more you will fall.
However, it is possible to remove a short sale or foreclosure from a credit report. According to the Federal Fair Credit Reporting Act, everything reported on a client's credit report must be 100 percent accurate and verifiable. ... You can challenge inaccurate reporting in your credit report, she says.
To rebuild credit after a short sale, do everything you can to stick to credit-positive behavior: Pay bills on time, keep credit card balances low and only take on new credit as needed. If you have credit card debt, getting a plan to pay down those balances will help your credit score as well.
Make no mistake: A short sale can damage your credit. If you want to buy a home in the future, you'll need to repair your credit to be eligible for the best interest rates and loan programs possible.
During a short sale, homeowners agree to sell a house for less than the amount owed on the mortgage loan. This type of sale requires the lender to approve of the deal. While short sales sometimes leave sellers owing money to the lender, they also provide an alternative to foreclosure.
The primary difference between a short sale and a foreclosure is in who is selling the property. With a short sale, the bank allows the borrower to sell the home for less than the outstanding loan amount. ... Prices for REOs can be better than short sales because the bank is not in the property management business.
Qualifications for a Short Sale
Once an offer is received and signed, I send it to the bank, along with the seller's short sale package and a prepared HUD. From that point to the time of short sale approval, the average timeline is about 60 to 90 days. It means 30 days to sell + 60 days for approval + 30 days to close escrow = 4 months, on average.
Foreclosures, like other negative marks, won't be on your credit report forever. In fact, a foreclosure must be removed seven years after the date of the first late payment that led to its default. ... A foreclosure that's accurately reported will be removed from your credit reports no later than seven years from its DoFD.
If you're worried about how selling your house will affect your credit, you should know that it may have little or no effect on your credit score. ... The biggest negative is that you will no longer have an on-going mortgage payment history that lenders and creditors can use to assess your credit risk.
A short sale is when a home owner sells his or her property for less than the amount owed on their mortgage. In other words, the seller is "short" the cash needed to fully repay the mortgage lender. Typically, the bank or lender agrees to a short sale in order to recoup a portion of the mortgage loan owed to them.
A short sale occurs when a property is sold at a price lower than the amount the homeowner owes on the mortgage, and the homeowner's mortgage lender(s) agrees to the "short" payoff.
Yet No Comments