The advantages of choosing a short sale over a foreclosure from a Murrieta short sale expert
If you are going through a tough financial situation and are worried that you have no choice but to let the bank take your home, this might not be the wisest decision for you.
As a Murrieta short sale expert, I have seen how selling homes as a short sale have benefitted homeowners who may have otherwise lost money and a good credit standing.
Here are a few benefits of doing a short sale:
- You are in control of the sale, and not your lender or the bank.
- You can spare yourself and your credit score from the stigma of foreclosure.
- You can sleep better knowing who the next owner of your home will be.
- Your short sale will be handled by a Murrieta short sale agent like any other normal home sale, with dignity and respect.
- You can still be current on your payments while doing a short sale.
The waiting period to buy a new home is shorter after a Murrieta Short Sale
According to the latest Fannie Mae 2016 guidelines, you can reapply for a new mortgage 4 years after a Murrieta short sale, with a 10% downpayment.
If you applied for a short sale due to extenuating circumstances, you can reapply for a new Fannie Mae mortgage 2 years after the short sale, with appropriate documentation of the extenuating circumstances. If you went through a foreclosure due to extenuating circumstances, the waiting time would be 3 years instead of 2 years.
You can also qualify for an FHA loan 1 year after a short sale.
Keep in mind that Fannie Mae and FHA guidelines are not a guarantee that you will be able to buy a home after those suggested timeframes since banks still have the final say and they might have overlays which can change the guidelines set forth by the government. Check with an experienced Murrieta short sale expert on available options you have when it comes to applying for a new mortgage after a short sale.
A short sale does less damage to your credit report compared to a foreclosure
A short sale does not appear as “short sale” on your credit report but as “paid in full for less than agreed” or “settled for less.” Certain HAFA guidelines allow for “no hit to credit” and can show up as paid in full. On the other hand, a foreclosure leaves a heavier dent on your credit report and remains there for 7 years.
Deficiency Judgments after a short sale vs. foreclosure
Deficiency judgments are negotiated between the short seller and the lender. In California, if the Murrieta short sale home is your personal residence and was financed through purchase money, you won’t have a deficiency judgment.
On the other hand, after a foreclosure, banks are usually unwilling to negotiate deficiency judgments.
According to the California Association of Realtors, a deficiency judgment can be filed regarding a hard-money loan if the lender forecloses under a judicial foreclosure versus a trustee sale, or if the second loan is a hard money loan and the sales takes place as a trustee’s sale.
You can ask your Murrieta short sale agent about these if it is too technical or hard to understand.
It’s easier to apply for a loan after a short sale than a foreclosure
Loan applications do not require you to include information about your Murrieta short sale. You can simply report your home as “sold.”
However, you will be required to answer the question “Have you ever had a property foreclosed upon or given a deed-in-lieu thereof in the past seven years. Your loan may be denied if the lender sees you have had a foreclosure in the past seven years.
Going through a financial hardship does not mean you have no choice but to foreclose your home. You can call a Murrieta short sale expert and ask about how to go about the short sale process so you can save yourself from the hassle of a foreclosure or visit http://www.temecula-shortsaleagents.com for more information about doing short sales.
Call me, Sidney Kutchuk, now at 951-217-6745, to get expert advice on Murrieta short sales. With my years of experience with successful short sales, I can guide you smoothly through the short sale process and help you avoid the pitfalls and stress that most sellers go through during the short sales process.