Uncertainty about how much of a hit one’s credit will take is a frustrating situation, but in a recent report from money.cnn.com, there was some information disclosed about what a short sale or foreclosure will cost, in terms of points on your credit score.
According to the CNN article, situations where a homeowner is 30 to 90 days late may penalize a homeowner by dropping their credit score anywhere from 40-110 points for 30 days or 70-135 points for 90 days.
A bankruptcy will cost 130-240 points, which is to be expected and the foreclosure, short sale, or deed-in-lieu penalties will cost 85-160.
Many financial advisors say homeowners will be better off in the long run by going through the short sale instead of a foreclosure.
a short sale is done when a homeowner simply can’t afford their home loan payment, so getting out of such a situation is going to be necessary to avoid things like missed payments or a foreclosure, which will obviously hurt one’s credit score.
A new view from many homeowners that point to “Strategic Default” is on the rise. Many are looking at their homes as investments, and when the dollar amount hits negative $70,000 or more…..homeowners are turning to a short sale to avoid greater future losses.
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