Selling a Home Short in the Sedona AZ Homes for Sale market and Credit
When Selling a Home in the Sedona AZ Homes for Sale Market, seller's want to know how a short sale or a foreclosure will affects their credit score in the future. Well, the proof is in the pudding... Read on: The following comes from Fair Isaac, which developed FICO scores, comparing two people to explain how mortgage delinquencies affect credit scores.
Fair Isaac derived these numbers from a theoretical calculation based on hypothetical borrowers – one with an initial score of 680 and one with an initial score of 780. FICO scores range from 300 to 850.
The hypothetical person behind the 680 score had six credit accounts, while the person with the 780 score had 10. The consumer with the 780 score had no missed payments other than the mortgage; the 680 example had two late payments before they failed to pay the mortgage.
After a mortgage delinquency, the two scores would look like this:
• After 30-day delinquency, 680 score drops to 620 to 640; 780 score declines to 670 to 690.
• After 90-day delinquency, 680 score falls to 595 to 610; 780 score goes to 645 to 665.
• After foreclosure, short sale, or deed-in-lieu, 680 goes to 575 to 595 and 780 drops to 620 to 640.
• After bankruptcy, 680 drops to 530 to 550; 780 declines to 540 to 560.
So the banks are now starting to work with seller's - selling their homes short. However, a Seller needs to know how doing that impacts their credit in selling a home in the Sedona AZ Home Marketplace and in buying a future property whether it's in the Sedona AZ Homes for Sale Marketplace or another area.