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SHORT SALES VS FORECLOSURES

ROBERT KAFLINSKI

805-450-9594

  Residential Realtor®  License # 01739255

Santa Barbara Real Estate ~ Santa Barbara Real Estate ~ Santa Barbara Real Estate ~ Santa Barbara Real Estate ~ Santa Barbara Real Estate ~ Santa Barbara Short Sale Help ~ Estate Santa Barbara

Santa Barbara

Real Estate

Santa Barbara Real Estate

BROWSE LISTINGS

How will my credit score be affected?

A short sale will affect your credit score differently depending on how many payments are missed, it can lower

your score as little as 50 points for approximately 12-24 months. Foreclosure, however, can reduce your

credit score anywhere from 250-300 points and usually affects your credit score for over three years.

How will my credit history be affected?

A short sale is usually reported as paid in full and is not reported on your credit history. A foreclosure will remain on your credit history for 10 years or more and will remain as public record.

Who decides if  my home should undergo a foreclosure or a short sale?

In both short sales and foreclosure, the decision is made by your mortgage lender. The most important aspects to getting a lender to agree to a short sale, and saving you the more damaging credit implications of a foreclosure, is to prove that you have no other way to pay the mortgage and that the amount received from a short sale is the fair price of the market. Lenders who believe they can receive more by taking possession of the home in a foreclosure and selling it themselves will not agree to a short sale.

How long will I have to wait to buy another home?

After a foreclosure, you may end up waiting another 24 to 72 months before a mortgage lender will offer you an interest rate that is acceptable. Most mortgage lenders report that for homeowners who have undergone a previous short sale they may get a reasonable interest rate in less than two years. Fannie Mae guidelines allow a short seller to apply for a new loan immediately if payments were kept current and had no 60-day late payments on their record.

What will be the effects on my future loans?

For most mortgage lenders you will not be asked to declare or be questioned regarding a short sale on any standard loan application (1003). In regards to foreclosure, you will be asked on any future standard loan application (1003) if you have had a property foreclosed in the last seven years, therefore affecting your rate. Fannie Mae backed mortgages will be available to you following a short sale after two years. Fannie Mae backed mortgages will not be available to you for at least five years if you have lost your home due to a foreclosure.

Does it affect my employment opportunities?

A short sale does not appear on a credit report and will not challenge your current employment status. In comparison, if you have a foreclosure on your credit report, some employers consider it a reason for termination or reassignment since many run credit checks on employees for certain positions.  A foreclosure can be extremely harmful to your chance of being selected for a new job if your credit report is taken into consideration.

How does a short sale versus a foreclosure affect the deficiency judgment?

If your short sale is handled successfully, the lender may give up the right to pursue a deficiency judgment against you. If the lender does pursue a deficiency judgment against you after a successful short sale, the amount will be considerably lower because your home was sold at a price closer to market value than that of an REO (Real Estate-Owned) sale. In all foreclosures, with the exception of those states without deficiency, the bank has the right to file a deficiency judgment against you. Since your foreclosed home will have to go through the REO process if not sold at auction for a lower sales price, this results in a higher deficiency judgment against you.

To find out if you qualify to short sell your home click here or call: 805. 450. 9594

Review the following comparisons between short sales

and foreclosures for a better understanding of why

short sales are a better option for most homeowners.

While a short sale is a complicated process, the outcomes of

your patience and diligence are worth it in the end.

Santa Barbara Real Estate

Santa Barbara Real Estate