How will a short sale affect my credit?

The main advantage of a short sale is not having a foreclosure on your credit report. Short sales may still show up on a credit report as a "pre-foreclosure in redemption" status. Although this can result in a credit score reduction of 100 points or less, a foreclosure will usually reduce your score by more than 250 points. According to Fannie Mae, an individual that forecloses must wait 5 to 7 years, maintain at least a 680 FICO score in the last 2 years, and pay a minimum 10% down on a future home purchase. We have seen customers purchase a new home in as little as two years after their previous short sale.