Chula Vista CA - Will my credit score be affected by a Short Sale?

Chula Vista Short Sales: How much will my credit score be affected by a short sale in Chula Vista.
Although we don't know the credit score computing equation, we do know that something as serious as a short sale or foreclosure can have devastating effects. I hear the question all the time, "How much will my credit score go down if I short sale my home?"

There is no simple answer to this question as it depends on a variety of factors such as your current credit score, number of open accounts, past history of collections or delinquent accounts, and how the lender will report the short sale, just to name a few. There is a common understanding out there that the higher your score the more it is likely to fall.

The most damaging factors to your credit in a short sale situation are late or missed payments. Fair Isaac (which developed FICO scores) recently provided some insight into how credit is affected by late mortgage payments:

30 days late: 40-110 points

90 days late: 70-135 points

The good news is that in most cases Short Sales are not reported on your credit as a "Short Sale". They are more commonly reported as settled or settled for less than owed. On the other hand, a Foreclosure is in fact reported as a "Foreclosure" on your credit. This simple standard of reporting can weigh heavily on your credit as currently the "Foreclosure" line item will most likely hit your credit hard. However, the reporting of settled or settled for less will not have as dramatic of effect, if at all, via a Short Sale.

Under current Fannie Mae underwriting guidelines a person is eligible to obtain a new home loan with 2-3 years of the short sale. However, under the same guidelines a person with a foreclosure will have to wait 5-7 years to obtain another home loan.

It is important to keep this in mind when choosing whether to short sale your home or allow it to go to foreclosure. The credit implications of a foreclosure far outweigh the credit effect of a short sale. Of course, it is always important to seek legal and tax advice when you are making a decision between these two options. We are here to assist in any many possible and also have a network of legal and tax advisors available for consultations.

I hope this blog has helped you understand the short sale process a little better and if you need more information check out all my short sale blogs at http://chulavista-shortsales.org

Thanks for reading this, Mike Watson.

Mike is a Real Estate Agent at Keller Williams Realty. Chula Vista Short Sales Realtor:

Phone: (619) 743-8884. mikekwcv@gmail.com.

View My homes for sale at www.sellingchulavistahomes.com.

Mike Watson specializes in loan modification assistance and short sales in Chula Vista California. Chula Vista Loan Modification Help, Chula Vista Short Sales. Chula Vista Short Sale Realtor. Chula Vista CA Short Sales. Chula Vista Realtor.