In the current economic climate foreclosure is a looming dread of many American families. Foreclosure not only strips families of their homes it ruins credit ratings for years to come. A foreclosure can negatively impact your credit score by up to 300 points, complicating your ability to recover from this painful and frustrating procedure. This being said there are options to help you minimize the damage that this causes to your life and finances. One such way to minimize damage is the process of Short Sale. A short sale is the voluntary sale of ones property in which the proceeds of sale fall short of the actual balance owed on the property. One must also obtain the mortgage holders’ permission to conduct a short sale transaction. This process can greatly reduce additional costs and penalties associated with the foreclosure process, and will only harm your credit score by 80 to 100 points.
In a world based around your credit score Short Sale can allow recovery in as little as 18 months as opposed to three years or more in the case of foreclosure. This reduced recover time is invaluable as you go through the process of repairing damage caused to your credit rating.
This is not to say that one should jump on the Short Sale bandwagon at the first sign of trouble. Taking up another job, or attempting to borrow money from friends of family that are in a better financial situation than yourself are ultimately better, though more humbling options.
Short Sale is not a solution to foreclosure, but a damage control method that one should consider only when foreclosure has become inevitable. In the end it will save you time, and money during this difficult period, and the reduction in damage to your credit score makes it the lesser of two evils.
While today’s economy can make it difficult to avoid a foreclosure situation there are options to help bring you closer to even ground. If you know you can’t avoid it, search for a Short Sale advisor. A simple internet search will help guide you to an array of Short Sale Specialists who can help you better understand the processes, benefits, and risks on Short Sale. While it may not be a solution, it can at least prevent much of the long term damage to your credit rating.
