Homeowners / Short Sale vs. Foreclosure
Short Sale vs. Foreclosure
If you're struggling to make mortgage payments, understanding the difference between these two options could change your financial future.
A short sale is always the better choice for homeowners needing mortgage assistance. Here is a side-by-side look at the most important differences.
| Factor | Short Sale | Foreclosure |
|---|---|---|
| Ability to Buy a Home Again | Generally able to qualify for a new mortgage in 2–3 years. | May have to wait 7–10 years to qualify for a new mortgage. |
| Impact on Credit Score | Less impact on credit. Usually remains on record for 2–3 years. | More damaging. Part of permanent public record for up to a decade. |
| Effect on Employment | A short sale on its own should not specifically challenge employment. | A foreclosure can be detrimental to current and future employment. |
| Security Clearances | A short sale on its own should not affect most security clearances. | One of the most challenging issues against a security clearance. |
| Deficiency Judgment | Can usually eliminate the deficiency completely, avoiding future liability. | Lender may pursue a deficiency judgment — you could still owe tens of thousands. |
| Relocation Assistance | You may be eligible for up to $3,000 or more in moving assistance. | No relocation assistance — you may be forced to vacate immediately. |
"If you're keeping score, a short sale is always the better choice for homeowners needing mortgage assistance. But it's best not to try tackling a short sale on your own — be sure you have experts with plenty of experience on your side to ensure the greatest chance of success."
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