Huntington Beach CA – How do foreclosures, loan modifications or short sales affect a credit score? Your credit score will be affected by late mortgage payments and a short sale.
However, there are 2 things that are considered horrible on your credit report. Those 2 are items are foreclosure and bankruptcy.
A foreclosure or bankruptcy will almost immediately lower a credit score by around 100 to 120 points. (The number is not hard and fast – it all depends upon what the score was before the foreclosure, and other factors that the credit bureaus don’t like to share.)
The way that they write the algorithm, a foreclosure will keep on pushing your score down for the next 2 years! A foreclosure can also stay on a credit report for 7 years.
Short sales are different from a foreclosure. Short sales and loan modifications by themselves do not hurt a credit score (depending on how they are reported.) It is the missed payments that ding your credit report.
How a short sale is coded/reported to the credit reporting bureau does make a difference in the affect it has on your score. It could be reported as a charge-off, a 120 day late payment, or a settled account.
Any of these are dings on the credit report, averaging 100 points. Here is the good news. The way they do the algorithm, it will damage your score for a shorter length of time than the 2 years a foreclosure does.
How a short sale is reported to the credit bureaus is something that can be negotiated as part of the process of the sales negotiations. Good negotiators can have a positive impact here.
But, in the end, the credit score should not be the first thing to consider when facing the decision to short sale a home.
You need to look at what is best for your family financially. The credit score is secondary to that.
Get advice from a trusted source, and then make an informed decision. Thinking about a short sale?
I can help you short sale your property and never pay the bank another penny. Send me an e-mail at Tony@HunthausenGroup.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 714-334-7808
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Thinking about a loan modification? Our Huntington Beach loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.
Thanks for reading this, Tony Hunthausen.
Tony is a Real Estate Broker Associate at Remax Select One. Huntington Beach Short Sales Realtor:
Phone: 714-334-7808. Tony@HunthausenGroup.com.
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Tony Hunthausen specializes in loan modification assistance and short sales in Huntington Beach California. Huntington Beach Loan Modification Help, Huntington Beach Short Sales. Huntington Beach Short Sale Realtor Huntington Beach CA Short Sales. Huntington Beach Realtor.
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Tony Hunthausen, Remax Select One, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales. Why?
Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit.
However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification.
We do not recommend that you stop paying your mortgage, because this will cause damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision.
This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.
You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale.
The views expressed here are Hunthausen’s personal views and do not reflect the views of Remax Select One.
This information on How will a Huntington Beach Short Sale or loan modification affect my credit score? is provided as a courtesy to our viewers to help them make informed decisions.