Is There Life After a Short Sale?
With all the talk of families losing homes, and the talk of short sales many want to know that if they choose to do a short sale, than how does that affect their future? The hype has been don’t foreclose, do a short sale; but is that better? Or, is that the same?
The plain truth on this matter is yes, there is life after doing a short sale. Losing your home in a foreclosure is much more stringent than doing a short sale, but it’s not the end of the world. In order to help you understand why this is the case, I am going to explain the guidelines on what your eligibility is after doing a short sale.
Any homeowner that loses their primary home in a foreclosure won’t be eligible for another Fannie Mae loan for five years. Any homeowner that does negotiate a short sale successfully will be eligible in two years for a loan backed by Fannie Mae. If an investor lets their investment properties go through strategic default or foreclosure than the period of waiting is 7 years. If you are able to successfully negotiate a short sale will be eligible within two years yet again. As you can see, the benefits of negotiating a short sale and working with the banks is more beneficial to you and your family and their financial future than just letting the property go.
When applying for any loans in the future, you will need to state on your loan application that you have had a home foreclosed on if you lose your home in a foreclosure or just let it go because walking away from it is the same thing as letting the bank foreclose on the property. However, the application doesn’t ask for any information regarding a short sale, so you won’t be penalized with higher rates in the future. Those who wish to walk away now, or let the home go will most certainly be affected by higher interest rates in the future. So, making bad choices now will affect you and your family. Consider the ramifications that this will have based on what you decide today.
Your credit score will most certainly be affected when a foreclosure happens. This can read on your credit report for up to ten years, and it will tank your credit score down as low as 250 to 300 for about three years. When doing a short sale on your home, the only thing that will show are late payments during that period, but the zero balance on credit will show that your home loan was “paid as agreed”. Even if your credit report states that the balance was “settled” on your mortgage, it may drop your score by 50 points, but this is better than being the absolute lowest range of credit you can get. This may show on your credit report anywhere between 12 months to 18 months.
The differences between allowing a foreclosure to take place and negotiating a short sale on your home can be staggering, but negotiating a short sale is always best. When you don’t know where to start you need to contact the experts. For more information on the process, go to www.inlandempireshortsaleresource.com. Help is only a phone call away.