Friday, July 6, 2012

When a Short Sale Does NOT Affect Your Credit Score

 Many individuals who would otherwise attempt a short sale don't do so because they believe it will negatively affect their credit score.  However, if you are not in default (your payments are on time), there is a pretty good chance you can short sell with a limited effect on your credit. Not only that, but you may also be able to purchase immediately following the short sale.

The key to short selling while maintaining your credit is to be on time with your mortgage payments.  In fact, one of the primary reasons individuals have had their credit so negatively affected due to a short sale is because of the late payments, and not necessarily because of the short sale itself.  That is why it makes me cringe when I hear of individuals that have purposefully defaulted because they were led to believe that that is the only way the lender would approve the short sale.   My team will NEVER recommend that a client purposefully default on a loan in an effort to conduct a short sale.  It is not ethical for us to do so and it is not necessary.

One of the ways to find out if the short sale will affect your credit is to find out how the bank will report it to the creditors once the short sale is complete.  Each lender has a different policy, and a knowledgeable experienced negotiator will take that into consideration when negotiating the short sale.  Once a short sale is successfully negotiated, in many cases you may also be able to immediately buy another property following the short sale.  The ability of an individual to buy will be based on many factors, so make sure you are working with real estate professionals who are well versed in all the regulations pertaining to short sales.  My team has successfully helped such clients and my negotiator is one of the best in the business.

Of course, the above scenarios are for individuals who can continue to make their payments throughout the short sale process.  To many it may seem counter intuitive that if you are able to maintain your payments, that you will be able to honestly claim a hardship, the basis for any short sale approval.  A "hardship" can mean many different things, and you do not necessarily have to be in a dire situation to get a short sale approved.  For example, if you are in the military and being forced to PCS, that alone can be the basis for the hardship and the approval.  Again, each lender is different and have different policies, but that is why we are here.  We will look at your particular situation, and make a recommendation based on our experience on how the short sale will affect your credit and your ability to buy again in the near future.

My team works in Northern Virginia, but even if you are located in another state, contact me and through my network of realtors nationwide, I will try to find you a licensed Realtor that can help you in your geographic area.  

Luisa Rodriguez
Prestige Property Group
Exit Choice Realty
Woodbridge, VA 22193
For quality service, please contact us and a member of our team will be more than happy to assist you. 


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