Petra Norris Managing Real Estate Broker Lakeland, FL (863) 619-6918 Contact Profile
What Happens to Your Credit Score After a Lakeland FL Short Sale?
In one of my recent appointments of listing a Lakeland Fl short sale. the seller asked me what impact does a short sale have on my credit score? Here are my thoughts and opinion about credit score impact when doing a short sale. Before applying for a Lakeland FL short sale for your home, it is very important that you enter into this with your eyes wide open. Forget about real estate agents who have told you that short sales won’t have any impact on your credit score. Of course it does, but the good news is that the damage is not usually as bad as what a foreclosure or deed-in-lieu could do to your credit score.
Loss of Points
Your FICO score goes down by a certain number of points depending on the undesirable action you have previously taken with regard to your financial standing or credit.
Late Payment – Before applying for a Lakeland FL short sale, you may have already committed one of the unforgivable sins and that’s to make late payments for your mortgage. Being one month behind can already decrease your FICO score by 40 to 110 points. If you are three months late, then your FICO score could go down by as much as 135 points.
Short sales versus foreclosures – A Lakeland Florida short sale can cause your FICO score to dip by anywhere between 85 and 160 points. In many cases, foreclosures and deeds-in-lieu cause more credit damage than short sales.
Bankruptcy – If short selling your home is not enough to save you from financial ruin, then you may be forced to declare bankruptcy. This would result into having as much as 240 points deducted
from your credit score. In worst case scenarios, you may even lose as many as 300 points because of the various factors that have contributed to your current financial state.
Waiting or Recovery Period
After having your Lakeland FL short sale application approved and successfully sold your home, you need to cool your heels for a little bit and allow your credit score to gradually recover. If you apply for a new loan the instant you have sold your house, your application will most probably be rejected.
You need to give credit bureaus enough time to catch up with your most recent transactions and update your records accordingly. You also need this precious amount of time to provide bankers and creditors with more reasons to believe that you have changed – for the better.
With deeds-in-lieu and foreclosures, most homeowners have to wait anywhere between 2 and 6 years before applying for a new loan. But with Lakeland FL short sales, you can wait for as little as 18 months before you can successfully apply for a loan.
Again keep in mind your credit score does affect differently based on your history of whether or not making other payments such as your car, mortgage and credit card payments. Being current on payments the less damaging is your credit score when doing a Lakeland Fl short sale.
You can check your credit for free at https://www.annualcreditreport.com/cra/index.jsp for Equifax, TransUnion and Experian
I hope you found this post useful! If you need help finding or selling your Lakeland, Florida home, please contact Petra Norris - REALTOR(R) at 863-619-6918. If you’re new to Lakeland, I’d especially like to extend a warm welcome. I value my clients and provide them with honest, reliable service. Allow me to introduce you to the Lakeland FL real estate landscape and all it has to offer .