The bottom-line fact is one in every 501 homes in America received a foreclosure notice in June. Some sellers can work out a modification with their lenders, while others might be considering a short sale or, at worst, letting their home go into foreclosure. The avenue a seller chooses to pursue will have a significant bearing on how soon that seller can buy another home when using conventional financing.
The hit to a credit report is identical, say expert mortgage pros, whether it's a foreclosure or a short sale. But the waiting time before a foreclosed-upon or short-sale seller can buy again varies, depending on the circumstances and type of foreclosure . . . read more about Buying Again After Foreclosure or Short Sale.
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At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.
Comments
We have an FHA lender that will allow you to buy a home after short sale immediatley with only 3.5% down if you weren’t late on the mortgage during the short sale process.
If you were late you will have to wait 2 years and put 20% down on a conventional loan.
Purchase After Short Sale is our specialty give us a call so we can discuss your situation.
Jared Leichliter
http://www.mortgagewholesalenetwork.com
888-842-4452
I have found a lender who can do it, too. However, the majority of the lenders who say they can are simply looking at the guidelines, and they have not actually closed such a transaction. Lenders seem to have overlays that prevent them from closing.
A good question for any buyer to ask a lender is: How many loans have you closed for borrowers who recently sold a short sale and were current?
I short sale our property on 9/2009 and we were delinquent on our payment. 8/2011 we were prequalified under a lender’s portfolio conforming classic conventional program with 5 percent down. Now that we have found a house and ready to buy, we were told that their guidelines changed from 2 years after short sale to 4 years effective 11/29/11. We are still months away from 3 years and do not have the 20 percent down needed to purchase this house. Is there a program that we may qualify for?
Who changed their guidelines? Fannie Mae or your lender? Perhaps you should check with a different lender? And the time starts from the date the short sale was reported to the credit bureau, not from the date you closed.
The lender’s guidelines changed. Yes, the short sale was recorded with the credit bureau on 9/ 2009. Elizabeth, do you know a program that could qualify buyers like us with 5 percent down after 2 years of short sale. We do not have excruciating circumstances and we were delinquent up to short sale closed. Any help or advise is greatly appreciated. Thank you and happy new year to you!
I have not heard of any lender who could do a conventional loan packaged for sale to Fannie Mae with 5% down under terms like this, ever. The down payment requirements have been 10% or greater after 2 years from the short sale. I hate to say this, but perhaps the lender misled you, hoping that once you started the loan, you would increase the down payment?
If you have to wait 3 years, you may as well go FHA and not conventional. The minimum down payment for FHA is 3.5%.
I am in a similar situation. We started a short sale on out house October of 2010 and closed until December 2011. We moved out of our house in March of 2011 because apparently we were starting escrow, but then our bank gave us a difficult time with the closing. We had a 80% and 20% loan. We weren’t late on payment on the 20% , in which my husband was also entitled, but because we thought it was closing we stopped paying too. Now, both of our credits are ruined and we are renting. I want to get back in a house, but i have heard many different things. My question is, when can we get back into looking on becoming homeowner again and would it be possible? Our rent almost as high as our mortgage was, so difficult to save :/
You should pull a copy of your credit report. Go to annualcreditreport.com and ask for a copy from ONE of the bureaus. You are entitled to one free report from each bureau each year. So if you pull one report from one bureau, you can actually check your credit 3 times a year, once every 4 months.
Look at the date your file was noted of the short sale, typically as “paid in full for less than agreed.” Count 2 years forward. Save a minimum of 10%. Keep paying your other bills and don’t be late on anything. Recheck credit at the 2-year point for conventional — 3 for FHA. FHA is less down.