Credit Pain
What happens to your credit score if you stop making your monthly mortgage payments? I found out some useful information from Tim Duval, a Mortgage Loan Consultant, with WrStarkey Inc.
Short Sale: A short sale will strongly hurt your credit score. The vast majority of lenders will not approve you for a mortgage for at least 12 months, maybe more, after the short sale. A short sale is, you own your home but have stopped making payments, and have sold the home to a buyer, at a lender approved reduced price, that is lower than what you owe on the property.
Foreclosure: A foreclosure will strongly hurt your credit score. It is very similar to a short sale. The vast majority of lenders will not approve you for a mortgage for at least 12 months, maybe more, after the foreclosure. A foreclosure is, you own your home, have stopped making payments, and the lender has foreclosed on the property and taken possession.
Behind in Payments or Skipped a Payment. Unfortunately, this also can impact your credit scores by reducing your score approximately a hundred points. Right now, lenders like to see a 720 credit score for a home purchase, so a reduction of 100 points to 620, may cause difficulty in purchasing a new home or getting a car loan.
What can you do? There are some great programs offered by Douglas County including a Foreclosure Mediation Program. I would think all the counties would have something similar but Douglas County will sit down, meet with you and offer mediation between you and your lender.
Filed under: Franktown Real Estate News, Important Information, People Are Talking About...
You have great blog and this post is good!
–