Posted on: 09th Apr, 2010 09:08 am
What is the benefit to doing a deed in leiu instead of foreclosing? Doesn't my credit get hit either way? Don't I have to pay tax either way?
Hi watsonsh,
A deed in lieu and a foreclosure has similar negative effects on your credit report. Both of them will lower your credit score by 250 points and will remain on your report for 7 years. Also, in both cases, you won't be able to qualify for a loan in the next 3-4 years. However, the major difference between a deed in lieu and foreclosure is that you won't be able to pay the deficient balance to the lender in case of a deed in lieu.
Thanks
A deed in lieu and a foreclosure has similar negative effects on your credit report. Both of them will lower your credit score by 250 points and will remain on your report for 7 years. Also, in both cases, you won't be able to qualify for a loan in the next 3-4 years. However, the major difference between a deed in lieu and foreclosure is that you won't be able to pay the deficient balance to the lender in case of a deed in lieu.
Thanks