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Home Foreclosure vs. Short Sales  The Pro's And Con's by Jared Wright If you can no longer pay your mortgage and selling your home is the only way out, the two ways this can be done are via foreclosure or through a short sale. Many people prefer a short sale because they are selling the home as opposed to it being sold from under them. On the other hand, from the lenders prospective, they look at short sales and foreclosures as more or less the same thing. It is still the sale of a home for the means of paying off the mortgage. If you foreclose, this record will remain on your record against you for a period of up to ten years, making it extremely difficult to enter new loans. You will need to work hard to rebuild your credit rating. A short sale can be done before foreclosure is forced upon you. You still need to remember that this will also be reflected in your credit report, but recovery of a good credit rating will take far less time. Any credit cards that are currently still being used are a good way to rebuild your credit score. Make payments on time and try and reduce the outstanding balance to zero. The real disadvantage of a short sale is that the price will usually be below market value, but a foreclosure auction will normally do no better. The remaining portion of the mortgage will be yours to pay off via other means. A plus is keeping control of the sale and not handing it over to the bank. These sales are treated like any home sale. Credit bureaus don't show short sales on your credit rating, but rather as a 'paid as agreed' or 'paid as less than agreed'. If you have come close to a point of foreclosure, any option other than foreclosure is usually always a better option. Bear in mind that it takes a long time to recover from foreclosure and it also affect other loans you might wish to obtain. In a nutshell, if refinancing isn't an option for you, than a short sale may be the better option. It shows lenders you are trying to resolve the problem and it will not remain on your credit history for the same length of time. Jared Wright is the marketing manager of Clivir.com - A free learning community site where you can learn more about foreclosures. You can follow the links to find more related articles such as foreclosure refinancing help and free government foreclosure listings.

 

 

 

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