Yes, a short sale, like foreclosure itself, will have a negative impact on your credit score.
It may not seem fair, but for homeowners who are stuck in underwater mortgages and struggling to make payments, the choice between foreclosure and short selling isn’t as simple as one might wish.
From the point of view of credit reporting agencies, short selling and foreclosure are the same thing.
There are advantages to choosing a short sale over walking away and letting the bank foreclose, though.
If you intend to buy property in the future, a short sale will only cause lenders to penalize you for two or three years, while foreclosure can prevent a new mortgage loan for five, seven, or even more years, depending on the lender.
At Zelenitz, Shapiro & D’Agostino, we understand that these are difficult choices made in difficult times, and can offer you valuable guidance that can minimize the impact of your next steps and help you get back on your financial feet.
Call us today at 718-599-1111 for a free consultation.