Mortgage Refinance Point updates you with the informations on mortgage, debt, insurance and credit industry.

Short Sale vs. Foreclosure: Which is the Better Option?

In this world loosing home is equal to losing everything. When you default on your mortgage payments there are foreclosure and short sale to repay the mortgage loan by snatching your home forever. This is your most unexpected experience of your life that will affect you throughout a long period of time with devastating condition of your credit score. There are some discussions about the better option to choose at the time of default on mortgage.

Waiting Period on credit report: The short sale stays on our credit report for 2 years but the foreclosure stays on the report for the period of 7 years. So the foreclosure is worst here.

Borrower’s benefits: The U.S.A. Government lunches some relief program to repay the mortgage payments with assistance by them to avoid the devastating foreclosure.

Lender’s Benefits: Under the same Government program as well as the borrower the lenders also are benefited by the incentive plan for the lenders for making shore sale instead of foreclosure.

Foreclosure is always worst: According to the Fair Isaac Corporation the both option is devastating for credit score by 200 to 300 points but the foreclosure maximum effect on the credit report. Even the lender has the rights to get deficiency judgment against the dues on the mortgage loan plus his costs for the foreclosure procedure.

Hence in this current scenario credit score is must to move a little bit in the financial world. So people always don’t like to hurt their credit score by any means. If there are some problems in the payment of the mortgage loan you can choose anything other than foreclosure as nobody can’t sit still 7 years without doing anything. So you have to keep in mind that the credit score has to secure and healthy to increase your smoothness in the financial market.

Can One Refinance to Stop Foreclosure?

Foreclosure is not expected for anybody. If you are facing foreclosure on your home, you need not to worry because there is many more way more option to stop foreclosure. The refinance of mortgage loan is the best option among all these other options to stop foreclosure processing. The refinance of mortgage loan is a differently new loan and it can provide from the existing lender or other one. If your are last some months behind in payments and still you hold good credit score, so you can go for refinancing your house under new loan terms. Refinance is the way to save your home in this situation of having behind in payments for mortgage loan.


Refinancing can avail after contracting your current lender or other lender. At fast you describe your condition to your present lender and they may suggest a long term loan or any low interest rate new loan. And sometimes your lender, usually a bank, likes to agree to change the term of loan which may helps you to pay off loan. After that you may not get solution you may contact other lenders and see what they can offer you after analyzing your credit score, income and your loan to value. If your condition may suit for refinance mortgage, you may then positively stop foreclosure.

The refinancing is possible to stop foreclosure only when you awake quickly to decide to go for refinance your mortgage at the time when you actually need it. You must have to calculate your affordability of payments before the time when you can not pay off dues on your current mortgage loan. So be prepare for refinancing your mortgage and pay off your lender in full with your good credit rating and before the time.

When should one go for Deed in Lieu of Foreclosure?

The deed in lieu of foreclosure is a legal deed instrument which helps you to transfer your mortgage property voluntarily to the lender in exchange for the lenders canceling the loan. The deed in lieu of foreclosure will stop the foreclosure procedure or allow the lender to promise that he will not go for foreclosure. It is good and healthy deal for both the lender and the mortgagee because it gives the quick relief from most or all of the owed associated with the defaulted loan and the lender gets the house easily in good resale condition without doing any thing.

When you unable to pay off your current mortgage loan and also you are unable to sell your home at the current value, so you thing you have to fill a bankruptcy or going for foreclosure both of which are harmful to your credit rating but there is also an another way with least effect on credit rating that the deed in lieu of foreclosure which is helps the mortgagee to restart in life as he is free from all obligations under the mortgage.

Even when you need to get again any home mortgage loan you must have to choose the deed in lieu of foreclosure as because this is the thing which helps you to avoid the foreclosure for defaulting on mortgage loan. When you are listed as defaulter to the mortgage companies, they will not approve you any other new mortgage loan in future.

So as like you everybody wants to be better in credit to the loan providers, you must choose wisely the way of more safety for future credit deals because life is not end here after going for foreclosure or not after filling a bankruptcy.