What will happen to Credit Score after doing short sale.

This is a very common question asked all the time as far as what effect it will have, after doing short sale on your record will affect your credit score and credit report. Let us first understand what a short sale is before identifying its effect on our credit. A short sale happens when a lender agrees to accept less than the amount owed against the home because there is not enough equity to sell and pay all costs of sale.

A short sale in general will affect your credit report less than a full foreclosure or deed in lieu of foreclosure. You can have a "settlement paid in full" negotiated with the lender, and obviously this will show better than simply doing nothing. No one may know exactly to perfection what the difference is in points on how your credit score would be affected whether you do a short sale vs. a foreclosure. Experts say that the damage that the foreclosure do to your credit is the same with what short sale on credit can do. This is because a short sale is part of the definition of foreclosure. For credit bureaus and lenders, this is a serious delinquency. If you are behind in payments and you owe too much on the house, what choices you really have anyways, if you do have any other choice, it is still better to choose for a short sale for various reasons. First, you can benefit from the proceeds even if it is not much. Another, you will be able to avail of a mortgage loan after two years, compare that to the five years you have to wait if your property is foreclosed. In addition, this helps the lenders too. Short sales can minimize the losses that the lenders will endure.

If you have lots of money, assets, reserves, and a high net worth and you just don’t feel like making payments or feel like paying down your principle balance, your lender won’t want to do a short sale. They will first want to get financial info from you, and a written hardship letter. This will make it quite clear to the bank that your only option is some help from the lender. This is where you see a seller that has a property listed on the MLS reading as "subject to bank approval". A full foreclosure can stay on your credit for up to 7 years. Freddie Mac recently passes some new laws for their company that would not allow some borrowers to finance a home for up to 5 years through them. This was more in the cases where people were just walking away, and didn’t have a true hardship case. Currently you can get a FHA loan where your last foreclosure was only 3 years ago. That’s how it is in the current market. You can always just go buy on a contract for deed, get into a rent to own, or rent a property while you are improving your credit. As a general rule you can still get loans with 30 day late payment on your record, it becomes less likely with a 60 day late, and very hard with 90 day late mortgage payment, etc.

It is better to consult your attorney and your accountant when you have to deal with selling your property in Short sale process. They can give you a good idea on how your credit score will be affected by doing a short sale.

For More Information Visit: - http://www.shortsalecredit.net