Posted on: 21st Nov, 2008 10:25 am
what does a deed in lieu of foreclosure do to your credit score?
what does a short sale do to your credit score?
what does a short sale do to your credit score?
Hi stacyjhowe!
Welcome to forums!
Both deed in lieu and short sale will have a negative effect on your credit score. The FICO scoreis will drop down by 75-100 points if you do a short sale whereas it can drop by 250 points if you are planning for a deed-in-lieu. Moreover, you should also remember that in case of deed in lieu foreclosure, you will also have to pay taxes for the forgiven amount. To know more, check out the following links:
Avoid Foreclosure with a Deed-in-lieu
Short Sale Affects Credit Score - how many points do you lose?
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
Both deed in lieu and short sale will have a negative effect on your credit score. The FICO scoreis will drop down by 75-100 points if you do a short sale whereas it can drop by 250 points if you are planning for a deed-in-lieu. Moreover, you should also remember that in case of deed in lieu foreclosure, you will also have to pay taxes for the forgiven amount. To know more, check out the following links:
Avoid Foreclosure with a Deed-in-lieu
Short Sale Affects Credit Score - how many points do you lose?
Feel free to ask if you have further queries.
Sussane
Stacy,
Fannie Mae just released new guidelines this week that restrict conventional financing availability to borrowers who have not had a foreclosure in the last 5 years, or no deed in lieu in the last 4 years, or no short sale in the last 2 years.
Clearly a short sale has less of an affect on your credit and your ability to buy another home. But, there is a real danger for a big tax bill if it is not done correctly. Currently the forgiven debt on a primary residence has been suspended until the end of 2009. But it is a temporary suspension that will expire.
The real zinger is on a 2nd home or investment property. Be careful.
Fannie Mae just released new guidelines this week that restrict conventional financing availability to borrowers who have not had a foreclosure in the last 5 years, or no deed in lieu in the last 4 years, or no short sale in the last 2 years.
Clearly a short sale has less of an affect on your credit and your ability to buy another home. But, there is a real danger for a big tax bill if it is not done correctly. Currently the forgiven debt on a primary residence has been suspended until the end of 2009. But it is a temporary suspension that will expire.
The real zinger is on a 2nd home or investment property. Be careful.