A short sale is less damaging to your credit score than a foreclosure. Your FICO score will drop by 75-100 points if you do a short sale, compared to 250 if you get a deed-in-lieu. By attempting a short sale, the borrower can avoid foreclosure and a decrease on their credit score. Moreover, a short sale may be faster and less expensive compared to foreclosure.
Each credit check will drop your score slightly, as lenders see you asking for more credit and possibly overextending.
The advantages of a short sale are like a deed in lieu in that you can reduce the credit score impact and get a new mortgage sooner. You may also be offered a financial incentive to short sell. The drawback is that a short sale may be more time consuming and tedious.
In rare instances where the lender agrees to report the short sale as "paid" and the borrower has not missed any payments, a short sale will have no effect on the credit score.
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This is comparable to how foreclosure affects your credit: According to a FICO study, both short-selling and foreclosing on your home can cause a score of 780 to drop as low as 620, while a score of 720 can fall to 570 and a score of 680 can drop to 575.
short sales hurt your credit ,maybe up to 10yrs. someone i know had to do this because of a divorce, his score is better then mine and still can’t get a loan of any kind and he did this in the fall of 2010, he tried to get a personal loan this mth and was told no.
Conventional Loan With 5 Percent Down For example, the minimum down payment for an FHA mortgage is 3.5 percent while it’s only 3 percent on a conventional, privately. max conventional loan conventional loans are the most popular type of mortgage used today. A conventional mortgage is a conforming loan because it meets the standards set by Fannie Mae and Freddie Mac.
Your credit report also will likely reflect the foreclosure.. A foreclosure or short sale will typically reduce your credit score between 85 and 160.
Sellers will take a hit of 200 to 300 points, depending on the overall condition of credit. This means if a seller’s FICO score before the foreclosure was 680, it could dip as low as 380. short sale: steep maintains that the effect of a short sale (providing the sellers are more than 59 days late).