Short Sale vs Foreclosure what should I do?
Well here is a table explaining the pros and cons
| Short Sales | Foreclosure | ||
|---|---|---|---|
| Pros | Cons | Pros | Cons |
| You can purchase a new home immediately after a short sale | You may have to wait five(5) to seven(7) years before a lender will approve your application for a new home loan | ||
| Credit reports do not show up as Short Sale | Your credit score will be affected, mainly from being deficient on your loan | Your credit score will be affected much worse than a short sale, also the word foreclosure will show up on your record which for some lenders/jobs is an instant rejection of application | |
| The lender may forgive the difference in debt between what you owe and the final price | You may be hit with a deficiency judgement for the remainder of the loan, but this remainder will be much less than a foreclosure | You will MOST LIKELY be hit with a deficiency judgement for the remainder of the loan | |
| If primary residence you are exempt from taxes on the deficiency until 2012 | It is a long process and it depends on how quickly you put together the right papers, how it is provided and how quickly the lender reacts | If primary residence you are exempt from taxes on the deficiency until 2012 | |
| You can stay in the house until closing date is finalized. | Same as short sale except most homeowners ignore notices from the bank which then leads to a surprise when they are evicted | ||
