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Arizona Short Sales And Your Credit

by Charlie Allred

Arizona short sales do have a negative effect on your credit. The real question is to what degree will a short sale effect your credit and is it ultimately better than the effect of a foreclosure.

There really are no hard fast rules… But in general you can expect a short sale to effect your credit in a lesser way than a foreclosure would. As I said, there are no hard fast rules so we are really dealing in generalities when it comes right down to it, but my sources tell me the following:

Because a short sale is really just a home for sale with special circumstances, the status of your loan does not go into “foreclosure” and therefore your credit report may not reflect the tremendous loss of points associated with that label.

However, because the only way to convince a lender to allow you to short sale your home is by showing a financial hardship, you are probably not going to be making payments on your loan and will ultimately be going very late. Depending on how long it takes for you to sell your property, that late payment number in terms of days can stack up.

One home owner, for example went almost 300 days with no payment on his loan and the net result was a loss of around 80 points on his FICO score. This can vary and you should speak with a professional to be sure of your personal credit and how a short sale will affect it.

In general, a short sale in Arizona will allow you to buy a home in the future much sooner than a foreclosure. In fact, in our office, we have experienced real estate professionals and short sale experts who can help you get very specific answers to your questions regarding short sales, and help you prepare the best possible short sale package for your situation.

Read more about Arizona short sales today!

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