Curious what will happen

The answer is… it depends.  How many mortgage payments did you miss?  How much debt do you have?  What is your outstanding balance to available credit ratio?  What is your overall payment history?  Your “point” impact will be calculated by FICO based on these and several other criteria.  Here is an actual example of how a short sale affected my Destin short sale seller’s credit score.

Property:  Destin short sale condo – investment property (not owner occupied)

Lender:  Aurora Loan Services

Number of Missed Mortgage Payments:  23

Short Sale Reporting:  “Settled for Less Than Full Amount”

Previous Credit Score: 745

“During Short Sale” Credit Score:  646

Credit Score 30 Days After Short Sale: 732 687 and 679 (from the three credit bureaus, Equifax, Transunion and Experian)

My Destin short sale seller was amazed that his credit score seemed to shoot right up after his short sale was complete.  This is not always the case. The bottom line is – you won’t know how your score will change until you complete your short sale.  But don’t be dismayed, you CAN start to rebuild your credit immediately.  And don’t be suprised if your financial future is brighter than you think.

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

www.ShortSaleSuperstars.com for agents

Read Wendy’s Destin Real Estate Blog

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Wendy is a short sale and pre-foreclosure specialist and has been featured in “Kiplinger Personal Finance Magazine” and “Florida Realtor Magazine”. Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. 

Subscribe in a reader

Subscribe to It’s Wendy’s Blog by Email

The post Report: Short Sales and Your Credit Score first appeared on Rulnick Realty.

Are you one of the many Americans recently affected by financial woes?  Have you missed payments, racked up your charge card, gone through a short sale, foreclosure or bankruptcy?  As a result, your credit score has probably dropped, maybe substantially.  If so, there is a great resource that may help you rebuild your credit.

MyFico.Com is a website recommended by my favorite financial guru, Suze Orman.  MyFico will allow you to monitor your score and will send you email alerts whenever your score might be affected, for example:

1.  You increase your balance on your charge cards (higher overall debt)

2.  You apply for a car loan or other installment debt (credit inquiries)

3.  You get the car loan (higher debt)

4.  You pay late

5.  Your credit card company lowers your limit (balance to available credit ratio)

By monitoring your score, you will be more conscious of how you can improve it.  You can even set a target score – to alert you when you reach your goal.  For example, if your score is 650 and your goal is 700- you will get an alert when you reach it! The other great thing MyFico does is offer a simulator to see how your score will change if you take specific action, like pay $10,000 down on your overall credit, or pay on time for five months. 

What can you do to improve your score?  Pay down credit cards, pay your bills on time and don’t take on new installment debt.  The more consistent you are with taking those actions, the quicker your score will improve. MyFico offers a 30 day free trial.  If you sign up, the fee is $9.95 a month or $99.95 per year. 

To get an annual free credit report, also consider the official Federal Trade Commission site www.annualcreditreport.com.   You can get a report once a year from the three credit reporting bureaus, Experian, Equifax and Transunion.

Watch your score and be aware of your spending.  Your credit will improve… maybe sooner than you think!

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Search All Destin Florida Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Destin Real Estate Blog

www.ShortSaleSuperstars.com for real estate agents

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com

Call Wendy Rulnick, Destin short sale agent, to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.   Wendy is a short sale and pre-foreclosure specialist and has been featured in Kiplinger Personal Finance Magazine and Florida Realtor Magazine.

Subscribe in a reader

Subscribe to It’s Wendy’s Blog by Email

The post How To Improve Your Credit Score After Short Sale or Foreclosure first appeared on Rulnick Realty.

There are a lot of rumors, supposed strategies and endless classes teaching “short sales”.  Here are the top five short sale “tactics” worth debunking:

1. You should put a quick closing on your contract to get a faster approval.  False.  Many short sale lenders have up to 70,000 files they are processing at any one time, and up to 600 files per negotiator. Threatening that a buyer will “walk” or that you will pull a contract because of a contract closing date will generally have no effect on getting the lender to respond more quickly.

2. You should send in multiple offers to the short sale lender.  False.  Most large lenders only want one signed contract.  Reference Countrywide’s short sale package stating:  “If there is more than one purchase contract, the seller may only submit ONE offer to Countrywide for review.”

3. You can demand the lender not issue a 1099-C on the cancelled debt.  False.  The lender is required by law to report the forgiven debt on a short sale as income.  You may not be liable to pay taxes on this debt, however, if you qualify under the IRS insolvency rule or the Mortgage Forgiveness Debt Relief Act.

4. You can negotiate with the lender to not report the short sale as “settled” to the credit bureaus.  False.  Again, most large lenders have standard approvals and reporting guidelines they will not vary, even if you hire an attorney.  With a short sale, however, you might be able to borrow again in two years, versus four to seven years with a foreclosure or deed-in-lieu of foreclosure.

5. If your lender knows you are trying to do a short sale, they will stop the foreclosure process.  False. Lenders cannot rely on a successful short sale transaction or even on a property receiving an offer.  Stopping their collection and foreclosure efforts would weaken their position and potentially cause further financial loss.  You may, however, be able to postpone a foreclosure sale date if you submit a reasonable short sale offer for consideration.

If you steer away from razzle-dazzle and tricky tactics, and rely on common sense, you will find your short sales a success.

The post Top Five Short Sale Myths first appeared on Rulnick Realty.