When a
mortgage becomes unaffordable, avoiding foreclosure
becomes a primary goal. It is a unique situation that
adjusts priorities and changes perspectives. For the
millions of homeowners unable to make their mortgage
payments today, there are alternatives to foreclosure
that can lead to an entirely different, more positive
financial outcome.
One of the
leading solutions to foreclosure today is a short
sale. In a short sale, the lender agrees to accept
the sale amount, even if it is less than what is owed on
the mortgage.
My goal is
to help you get your life back to normal as quickly as
possible, and part of that is your ability to own a home
again. Here, a short sale can help. After previous
mortgage difficulties, owning a home in the near future
will depend on your loan eligibility, which is severely
impaired by foreclosure. A successfully negotiated short
sale will allow you to be eligible for a Fannie
Mae-backed loan in only two years, as opposed to five
years after a foreclosure (seven years if the property
is not your primary residence).
What
would it mean to own a home again in three to five
years?
When
attempting to acquire a mortgage through another
company, your loan application will ask whether you've
had a property foreclosure in the last seven years.
These applications do not ask about any past short
sales, meaning if you have avoided foreclosure through a
short sale, your chances of securing a future loan with
lower interest rates are substantially better.
Also, you
can immediately apply for an FHA (Federal Housing
Administration) loan after a successful short sale,
assuming you are current on your mortgage payments
before the sale. If you aren't current, you will be
eligible after just three years. If you want to
determine your eligibility for this process, contact me
as soon as possible.
Your
Future Credit
A short
sale may only lower your credit score by as little as 50
points.
When
facing the possibility of foreclosure, your credit score
is also at stake -- something that has become a stronger
factor in lenders' decisions to provide loans, low
interest rates, credit cards, etc.
A short
sale, by itself, can lower your credit score by as
little as 50 points, as opposed to anywhere from 250 to
over 300 points in a foreclosure. In addition, a drop in
credit due to a short sale can be recovered as quickly
as one year, while a foreclosure will affect your credit
for at least three years. Your credit history, which is
also taken into account for loans, does not keep record
of past short sales, but a foreclosure will be publicly
recorded for at least 10 years.
Your
Future Employment
Current
and future employers have the legal right to check their
employees' credit, and many of them do so regularly. If
an employer checks your credit, you want the report as
clean as possible. Unlike foreclosure, a short sale is
not directly reported on your credit (it will usually
say "paid as agreed", "paid as negotiated", or
"settled").
If your
job requires a security clearance -- such as police,
military or government work -- a foreclosure most often
presents an issue. Since short sales are currently not
explicitly reported on credit reports, they do not
challenge most security clearances.
Remember that you can also
count on me to help you every step of the way. Please
contact
me if there is anything I can do to help you.
