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Does a short sale effect your credit like a Foreclosure does? Whats the difference?

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efranco Joined: 27 Oct 2009 Posts: 1 1.26 Dollars($)	Posted: Tue Oct 27, 2009 2:26 pm    Post subject: Does a short sale effect your credit like a Foreclosure does Like 0 Dislike 0 Whats the best way to go: Short Sale or Foreclosure? My client would like to by a new home ASAP, but he can not make his payments on his home. Should he short sale it if possiable or let it go?
jenkin7 Joined: 04 Jun 2007 Posts: 4537 Location: Hawaii 728.43 Dollars($)	Posted: Tue Oct 27, 2009 10:26 pm    Post subject: Like 0 Dislike 0 Hi efranco, A short sale drops your credit score by 75-100 points approximately, while a foreclosure affects your credit by around 250 points. However, in both the cases, a borrower has to wait for a minimum of 2 years to qualify for a new loan. Whether it is a short sale or a foreclosure, he will be responsible for the deficiency and the lender will have the right to come after him to recover the loan balance. When compared to foreclosure, I believe a short sale will be a better option, given its slightly less damaging effect on the credit.

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