Grand Rapids Short Sales – Better Than A Foreclosure?

Short Sales and Foreclosures – How do they affect my credit?

 Well the quick answer to that is, ‘Badly’. There is no getting around it, a Short Sale and/or a Foreclosure will both negatively affect your credit. Having said that though, there are other factors that should be considered if you are in this unfortunate situation.

There are three situations that greatly effect a FICO score and they all carry the same weight.

1. Serious Delinquency
2. Derogatory Public Record
3. Collections Filed

Foreclosures remain on your credit report for up to 10 years and in the event you are applying for another loan, this must be stated on your loan application. Just because a Short Sale is not specifically stated on a loan application does not mean it is any less damaging than a foreclosure, however Fannie May and Freddie Mac will lend to you in two years versus five for a foreclosure. That is pretty important!

Another factor that is not talked about is the incredible stress of being in such a distressed state. With creditors hounding you, a contrant stream of letters from collectors and the general feeling of hopelessness from just having lost a job, it isn’t much fun and no one likes to face the unknown. This is another reason why a Short Sale is better than a foreclosure. Getting that beast off your back and allowing you to sleep better at night is a very important factor.

Having an experienced agent and broker in your corner during this time is very important. A good Grand Rapids’ agent with a proven short sale system in place can save a lot of time and stress during this process. For information on our short sale program, visit my website or contact me any time.