Part I Foreclosure vs. Short Sale: How will it affect the Homeowner?

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If you are wondering whether you should opt for a short sale or foreclosure, take a look at the differences in how each will affect you as the homeowner with the following issues:

Security Clearances. A successful short sale does not challenge most security clearances.  A foreclosure, however, is the most challenging issue against a security clearance besides that of a conviction of a serious misdemeanor or felony.  If the homeowner is a police officer, in the CIA, military or other positions where having a security clearance is required, in just about every case it will be revoked and their job will be terminated.

Current and Future Employment. As employers have the legal right to continuously check the credit of all employees in sensitive positions on a regular basis, in many cases a foreclosure will be grounds for reassignment or termination; because future employers will also have the right to check your credit history this may also make it difficult to change jobs.  A short sale, on the other hand, will not be a challenge to your employment—current or future—as it is not reported on a credit report.

Credit Score and Credit History. A foreclosure will remain on public record for 10 years or more on an individual’s credit history, unlike a successful short sale which is not recorded on credit history.  In addition, your credit score after a foreclosure may be lowered, typically from 250 to over 300 points and affect your score for over 3 years; a short sale may only lower your score as little as 50 points, with only late payments on your mortgage showing up.  A short sales effect may be as short-lived as 12 to 18 months.

For more information on foreclosures vs. short sales in Wasilla AK contact The Kristan Cole Team today.