The Differences are very clear.. .
Should you do a short sale or just let them foreclose on your property?
It’s your choice:
How will this affect my credit?
Your financing will be severely limited and very expensive for the next 5 -7 years for foreclosure or a deed in lieu of foreclosure.
If you had an approved short sale the time needed to purchase again goes down to 2-3 years and without the strict lending requirements that a foreclosure required, such as a minimum FICO of 680.
Tip: Having housing is a fate everyone eventually faces. You have to pay to live somewhere anyway. Renting temporarily while your credit recuperates is ok. .but for those willing to look into buying their own house in a couple or so years. . the rewards can be significant because you will be buying your new home at more realistic prices and not inflated and puffed up by a greedy lender.
Non-Primary Residence (for Investors only)
Any investor that allows a property go in foreclosure will be ineligible for a FANNIE MAE backed investment mortgage for a period of at least 7 years
Any Investor that successfully negotiates a short sale can obtain a FANNIE MAE backed loan as early as 2 years.
Tip: Having a bad investment should not be the end of the world.. .but ignoring the problem and getting stuck with a negative equity month after month can be the kiss of death for many investors
Future (any) 1003 Standard Loan Application
Future 1003 Application, any prospective applicant will have to answer YES to the question that asks on section VIII
“Have you had a property foreclosed upon, given title or deed in lieu of foreclosure
There is no similar question or declaration for short sales.
Tip: Typically when you apply for a mortgage, you’ll be asked to complete a Uniform Residential Loan Application. (1003) This standard residential mortgage loan application is a four-page document that asks in-depth questions about you, your income, your assets and liabilities, and your credit as well as a description of the property. You should try and avoid at all costs having to say YES to the question about foreclosures. You can do a short sale now.. or pay higher interests and higher monthly payments than everyone else for years to come.
Security Clearance and/or any future employment with the United States Government
Most employers have the right to check ask for the credit reports of all it’s employees.
Outside of a conviction or a misdemeanor or a felony, a foreclosure will cause your clearance to be revoked and in some cases your position will be terminated.
If you are a police officer, Government employee, security officer or any position that will require you to have a security clearance.. .this is bad news for you
There is no short sale reported to your credit and therefore does not challenge your employment.
Tip: Many people think that they can go to a company or agency and apply for their own security clearance. This is far from the truth. Only the federal government can grant someone a security clearance, and to get one the applicant must work for a government agency or contractor and conduct business that justifies granting him or her access to highly sensitive information.
Facing “The Deficiency Judgment “
A deficiency judgment is the difference of what the property sells for (plus expenses) and what you signed in the original loan.
The bank has the right to pursue a deficiency judgment against you
In a successfully short sale negotiation , a deficiency judgment can be removed when the Lender approves the short sale.
Should you do a short sale or just let them foreclose on your property?
It’s your choice:
How will this affect my credit?
Your financing will be severely limited and very expensive for the next 5 -7 years for foreclosure or a deed in lieu of foreclosure.
If you had an approved short sale the time needed to purchase again goes down to 2-3 years and without the strict lending requirements that a foreclosure required, such as a minimum FICO of 680.
Tip: Having housing is a fate everyone eventually faces. You have to pay to live somewhere anyway. Renting temporarily while your credit recuperates is ok. .but for those willing to look into buying their own house in a couple or so years. . the rewards can be significant because you will be buying your new home at more realistic prices and not inflated and puffed up by a greedy lender.
Non-Primary Residence (for Investors only)
Any investor that allows a property go in foreclosure will be ineligible for a FANNIE MAE backed investment mortgage for a period of at least 7 years
Any Investor that successfully negotiates a short sale can obtain a FANNIE MAE backed loan as early as 2 years.
Tip: Having a bad investment should not be the end of the world.. .but ignoring the problem and getting stuck with a negative equity month after month can be the kiss of death for many investors
Future (any) 1003 Standard Loan Application
Future 1003 Application, any prospective applicant will have to answer YES to the question that asks on section VIII
“Have you had a property foreclosed upon, given title or deed in lieu of foreclosure
There is no similar question or declaration for short sales.
Tip: Typically when you apply for a mortgage, you’ll be asked to complete a Uniform Residential Loan Application. (1003) This standard residential mortgage loan application is a four-page document that asks in-depth questions about you, your income, your assets and liabilities, and your credit as well as a description of the property. You should try and avoid at all costs having to say YES to the question about foreclosures. You can do a short sale now.. or pay higher interests and higher monthly payments than everyone else for years to come.
Security Clearance and/or any future employment with the United States Government
Most employers have the right to check ask for the credit reports of all it’s employees.
Outside of a conviction or a misdemeanor or a felony, a foreclosure will cause your clearance to be revoked and in some cases your position will be terminated.
If you are a police officer, Government employee, security officer or any position that will require you to have a security clearance.. .this is bad news for you
There is no short sale reported to your credit and therefore does not challenge your employment.
Tip: Many people think that they can go to a company or agency and apply for their own security clearance. This is far from the truth. Only the federal government can grant someone a security clearance, and to get one the applicant must work for a government agency or contractor and conduct business that justifies granting him or her access to highly sensitive information.
Facing “The Deficiency Judgment “
A deficiency judgment is the difference of what the property sells for (plus expenses) and what you signed in the original loan.
The bank has the right to pursue a deficiency judgment against you
In a successfully short sale negotiation , a deficiency judgment can be removed when the Lender approves the short sale.