Kiwi asked:
I know the obvious, I mean you really wouldnt be able to buy another house.
I know the obvious, I mean you really wouldnt be able to buy another house.
Does it affect your overall score though or just when it comes to buying a house? I mean, you dont know the whole story, what if 2 people divorce and neither of them can afford it themselves, they just let it foreclose and move on.
How long does a foreclosure stay on your credit?
Both….your overall score and your ability to buy a house.
Foreclosure or Deed-in-Lieu of Foreclosure
Both of these solutions affect credit the same. Sellers could take a hit of 200 to 300 points, depending on overall condition of credit. This means if a seller’s FICO score before foreclosure was 680, it could dip as low as 380.
Short Sale
The effect of a short sale on a seller’s credit report is identical to that of a foreclosure. The ding on credit will show up as a foreclosure in redemption status, which couldl result in a loss of 200 to 300 points. This means a short sale with a previous FICO of 720 will see it fall from 520 to 420.
It will remain on your report for a period of 7 years.
Hope this helps answer your question.
A foreclosure does to your credit what a semi truck does to a watermelon. Completely obliterates it. It stays on your credit for 7 years, but you are able to buy a home in about 2 years if you rebuild your credit.The good news is over time your credit can be rebuilt. Just continue to maintain timely payments of all of your other credit obligations.
A foreclosure will affect your overall score, especially because you will have a bunch of late mortgage payments leading up to the foreclosure. The late payments will show that you did not make good on the monthly cost of the credit, and the foreclosure will show that the lender took back the collateral for your loan.
A foreclosure will be pretty much fatal to any attempts to obtain a new mortgage within the first two years after you lose the house. If you are not planning on buying a home again in that time, then the foreclosure will have a negative effect on your credit, but you may not notice it if you are not applying for credit.
Within a few years after the foreclosure, though, you can probably qualify for a new mortgage at a decent interest rate. Take the next few years and save up some money for a down payment and it will be even easier to qualify. The foreclosure will stay on your credit for seven years.
In the meantime, you can use your other credit lines (credit cards, care loans, etc.) and pay them on time to boost your credit score back up. It will take some time to fully recover from the negative effects of the foreclosure, but your current use of credit is much more important.
Hope that helps.
ForeclosureFish