A Short Sale is when a homeowner owes more on their home than what the home is worth and they are asking their mortgage lender to take less than what is owed. The mortgage lender for the most part will take the market value of the home...The next Question becomes......What is the property Worth and what or who determines the value.......The bank will use an appraisal and various brokers' price opinion to determine the value. The homeowner and their agents can also use various marketing techniques to determine value. Once value is establish and both the bank and the homeowner as an agreement a short sale can take place...This is the basic idea in a nut shell
Most banks now are doing short sales without the homeowner having to miss a payment. Some banks will do one with only a 30 day late. This is a good thing in determining how will a short sale affect your score
By monitoring your credit report you can determine how a short sale will affect your credit score. Obviously the less payments you miss during the short sale process will determine your score after the process as being completed. The short sale itself will affect your score based on how it is reported on your credit report. If it is reported as a charge off or as a delinquent pay off then it will affect your score. This sometimes can be done in the negotiations process. One of the best things to do is to ask the bank to report it as Paid As Agreed or Paid In Full or Payments Settled. You can also dispute how it is reported to the credit bureaus. If you already completed your short sale and it was reported in a derogatory way you can send in a dispute to your bank to change the way it is being reported
Your credit score is made up by many factors and the more you make payments as agreed the better will be your score. However you can still fix your score if your miss payments. Nothing is in stone so you can always dispute items on your credit report. We have had clients who as bought a home right after a short sale. It can still be done. One of the keys is to keep making payments while in the short sale process but if you cant or your lender wont allow it. Get right in a credit restoration program right after the short sale. Here is a Video to help you find a great program. A Short Sale does not have to stop you in your track or ruin your credit. I have had homeowners say,,,,I will never buy another home while going through a short sale and then once it is over and they start renting and have to deal with a landlord, they then start looking for ways to buy another home.
United Credit Restoration Services is a great way to start,,,,they also have a savings program to help you save for another home while restoring your credit. They offer great incentives and can usually put you back on the right track within months to a year.
It is best to learn the facts about your FICO score and what affects it. By being proactive and monitoring your score you will have a better outcome. Most people shy away from knowing their credit score and only get disappointed when they go to make a big purchase such as a car or home or furniture and get turned down because o their credit score. You should know your score every step of the way so you know how to fix it. There are many companies out there that work for free or for a low cost to help you with your credit score. You can do a short sale and still buy another home and a car or whatever you want to do. You can fight derogatory items on your report and you can also request during your short sale negotiations how you want the bank to report your setllement.
Visit our facebook page and become our fan to get up to the minute changes on this process and how it will affect your credit. Stay educated as this process keep changing and various banks as different requirements. If you are thinking of doing a short sale, first determine if that is the right choice for you. We have a website that will give you some information on the process
Lastly a short sale looks better on your credit report than a foreclosure........
Article written by Sandy Giff/ The Giff Group/ Keller Williams Realty/ 407 445 7009/ or 845 401 4345 Visit our website at http://orlandoshortsalesnow.com/
