Short Sale Vs Foreclosure

Short Sale Vs Foreclosure

short sale vs foreclosure

When deciding between a Short Sale vs Foreclosure their are several factors to keep in mind. For some it’s a no-brainer just let the bank take the home, that might not always be the best decision.  No matter which way you go, always obtain legal and tax advice before making a decision between a short sale vs foreclosure.

Short Sale Benefits

Here are a few benefits of doing a short sale:

  • You are in control of the sale, not the bank.
  • You will know who is buying your home.
  • You will spare yourself from the years of credit hassle that comes with a foreclosure.
  • Contrary to popular belief, you can be current on your payments and still apply for a short sale.
  • Your home sale will be handled like any other home sale, with respect and dignity.

Buying After a Short Sale

If you were current Fannie Mae’s guidelines will allow you to immediately apply for a mortgage.  Fannie Mae’s 2016 guidelines allow you to reapply for a mortgage in as little as two years after a short sale with a 10 percent down payment if late depending on the circumstances. You may also qualify for an FHA loan one year after a short sale.

Short Sale – Possibly Immediately

Buying After a Foreclosure

The standard waiting period after a foreclosure is seven years, noted by Fannie Mae in its latest guidelines. Similar to its short sale guidelines, FHA allows those who foreclosed on their homes to reapply for mortgages after 12 months.

Foreclosure – May have to wait 7 years

Affects on Credit

No matter which way you chop it up, this won’t be good to your credit.  But the short sale route is no where as close to as damaging as a foreclosure.

After a short sale your mortgage will show as either paid in full or negotiated, lowering your score about 50 points and lasting effects will be about 12-18 months.  After a foreclosure your mortgage will show as “foreclosure’ and will lower your score on average about 250 points and the effects will be on your credit history for 10+ years.

Final and Best Option

If you are considering either of these options you may want to consider a 3rd…a cash buyer.  In our opinion this is much better then either option as your mortgage will be paid in full and their will be no further tarnishing of your credit.  It will also be the fastest route to be done and put this behind you.

Here at Now Home Buyers we buy houses cash and will help you get out of your home quickly and pay off all liens.  Give us a Call Today to see if we can help you (954)980-0845 or e-mail us @ or if you want a Cash Offer on your House Click Here!