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It takes courage to ask this question, but necessary when owners have struggled to make mortgage payments for a while. Any smart Denver real estate agent would tell you to consider these three factors when comparing a short sale or foreclosure.

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Remain Eligible to Qualify for Future Mortgages

While lending institutions vary in requirements for mortgages, they are in agreement: people who’ve chosen a short sale versus a foreclosure qualify for home loans faster.  For example, the Know Your Options page on Fannie Mae’s site a foreclosure can delay a potential buyer for several years longer than if their history includes a short sale.

The Effect on Your Credit Score

How about the impact on your credit score?  Actually a recent FICO study shows there is actually little difference in how a either option affects your credit score.

Moving Your Family

When a family is weighing a short sale or foreclosure, they’re usually experiencing other significant stress. So it’s in the best interest of the parents and children to make the transition as easy as possible.  A foreclosure could create a sense of foreboding as the family anticipates the unknown date of when the bank will repossess their home.  Or even the shame of having to sneak out of the home. In a short sale the bank works with the family to set a moving date.There will likely be less stress, because there’s no hiding and the bank and neighborhood can expect new owners.

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There are clear benefits to a short sale versus a foreclosure.  Banks appreciate owners’ pro-active decision-making.  Plus there’s a sense of dignity owners can feel, because they’re not acting like victims but are empowering themselves to move forward with their lives.

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Need a Denver real estate agent for a short sell?

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Learn more about RE/MAX of Cherry Creek’s team.

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Resource:http://kcmblog.com/2011/05/04/is-a-short-sale-or-a-foreclosure-my-best-option/