Financing in Atlanta>Question Details

joellemcewen, Home Seller in 08096

I am a looking to relocate to Atlanta. In the process of a divorce and short sale on my property own with my ex, now my excellent credit is terrible.

Asked by joellemcewen, 08096 Sat Jan 5, 2013

I am looking to buy as opposed to renting, with a down payment to $20,000. How can I get a loan?

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This question was asked from this property: http://www.trulia.com/rental-community/9000034641/2924-Clair…

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8
Sonja Tani’s answer
Hi Joel,
It sounds like you have quite a mess on your hands. A Short Sale will definitely ding your credit. A Conventional Mortgage is not going to happen. It would seem that your only choice in this case would be a Private Lender. Since most Private Lenders require a larger down payment, I would think you could acquire a home in the $60,000 range. There are plenty of homes in that price range in the Atlanta area but most will need work to be Move-In ready.
All that aside, what you did not include in your question is your income. That, along with the Appraised value of the property you attempt to buy is what Private Lenders look at. They want to make sure that you can repay the loan and that, if you do default, there will be enough equity in the property so they can recoup their investment.
Given that there are some unanswered questions regarding your situation, may I suggest that you contact a Lender that I have worked with in the past with great results. They are a licensed lender in the State of Georgia and have placed many Home Mortgages here. They will lend up to 12 years on a Residential Mortgage, giving you plenty of time to get your affairs in order and put that Short Sale behind you. They will not include a pre-payment penalty clause in their agreement, allowing you to refinance at a more favorable rate as soon as you can quality. You can give them a call and clarify some of the issues and see if they can help you. Their contact information is:

The Westmoore Group, LLC
http://www.westmooregroup.com
Ph: (646) 801-6190
Fx: (646) 619-4291
The Westmoore Group, LLC is a licensed lender in the State of Georgia and operates under the license #30544.

Good luck in acquiring your new home.
0 votes Thank Flag Link Thu Jan 10, 2013
BEST ANSWER
With regard to financing, I can help you with that. I have private investors who will buy the house on your behalf (if repairs are needed) or you can go straight to the source to get financing for up to 5 years. This will give you enough time to recover from the short sale and credit situation and get into a loan. Although this is available to you, I agree with Bruce Ailion, try to hold off on going this route. This product is not cheap (typically 6 to 7% in fees due at closing plus application fee) and the rate is not great (start rate is 9.5%).

On the flip side, I've noticed that finding a house to rent around here is super expensive, risky (due to owner's not paying the mortgage) and there's no tax write off in renting. If anything, I would suggest you buy something that is easy to rent (town house/duplex) in case you decide to move. This way, you can make some money on rental income (have your Realtor recommend someone for managing the property). Get certified to rent to section 8 housing to guaranty the rent. After divorce, you never know when that extra money can come into use.

Using a Realtor who is knowledgeable with short sales and/or foreclosures will be key for you if you want to keep the majority of your money in your pocket on buying the home. We prefer to work with Realtor's.

Credit repair is not going to save you. If anything, it may increase your score but the short sale will still have affect on you as Rodney Mason explained. It becomes public record and the closing Attorney will pull up information of the short sale. You will have spent money on appraisals, inspections and earnest money to have it crash on closing day.

Credit repair can be deceptive to an individual in that bad debt that is disputed, causes scores to go up because they are ignored by the credit agency. The worst thing a person can do is try to buy a house while disputing accounts because the lender will have you remove the dispute, thus lowering your score and wasting your time. Aside from removing the dispute, the credit repair company has to start over again on reparation of your credit and it cost you additional fees. Credit repair usually costs around $600 and the money can only be collected up front by a company represented by an Attorney.
0 votes Thank Flag Link Tue Jan 8, 2013
0 votes Thank Flag Link Tue Jan 8, 2013
With "terrible credit" and a recent short sale, a traditonal mortgage is probably not an option for you at this time. Lenders are required to look at your credit as it is today, not how it was in the past. One of the mai factors will be the date of the completion of the short sale.

FHA is generally the most lenient for borrowers with a previous short sale. In 2010, HUD issued guidance to all lenders regarding borrower eligibility for FHA loans when:
• A previously owned property was sold for less than what was owed (short sale), or
• There is a principal write down of indebtedness that cannot be re-financed into a new mortgage (short pay off).

Short Sales
As outlined below, borrowers are not eligible for a new FHA loan if
• They pursued a short sale on their principal residence simply to take advantage of declining market conditions, and purchase, at a reduced price, a similar or superior property within a reasonable commuting distance.

Borrowers will be eligible for a new FHA loan on a short sale, if:
• The borrowers were current on the mortgage and other installment debts at the time of the short sale, and
• The proceeds of the short sale serve as payment in full.

Borrowers who were in default at the time of the previous short sale will not be eligible for a new FHA loan for 3 years (based on the date of the pre-foreclosure sale).
Should the short sale have been due to an extenuating circumstance such as death or serious illness of a primary wage earner or job relocation requirement, an FHA in less than 36 months might be possible. A divorce would not be considering an extenuating circumstance.

With a Conventional (Fannie Mae/Freddie Mac) mortgage, at least 24 months must have passed since date of the short sale. The minimum down payment will be at least 20%. After 4 years have passed, the minimum down payment is 10%.

For a VA mortgage, at least 12 months must have passed since the completion of a short sale.

Regardless of the above, if the mortgage that the short sale was completed on was an FHA, USDA, or VA loan, then waiting period for a new FHA, USDA, or VA mortgage will be at least 36 months. This is due to the fact that you cannot get a government backed loan, when a claim has been paid in the last 36 months on another federally insured loan (including student loans)

Working with a knowledgeable and seasoned loan officer is critical in today's market. Getting Pre-Qualified is the only way for you to find out your options, but it sounds like you are curretly in the middle of a short sale. If that is not the case, to get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
0 votes Thank Flag Link Sun Jan 6, 2013
I and most would advise not making a major decision/commitment during or shortly after a major life change. Purchasing with private money rates will likely be more costly than renting. Given your fluctuating life situation making major long term commitments when your short term situation is unsettled will most likely result in a suboptimum result. Get divorced, determine the direction your life is headed, clean up your credit and then make a purchase. As a REALTOR, I believe in home ownership but as an honest advisor, I would be reluctant to sell you a home.

Bruce Ailion,
RE/MAX Greater Atlanta
An Atlanta Real Estate Expert Serving Clients Since 1979
RE/MAX Hall of Fame – REALTOR Phoenix Award
CRS, CRB, ABR, MSRE, CDPE, e-PRO, ESQ
Certified Residential Specialist
Certified Real Estate Broker
Accredited Buyers Agent
MS Real Estate and Urban Affairs
Certified Distressed Property Expert
Certified Internet Professional
203K Certified Specialist
Attorney
2050 Roswell Road
Marietta GA 30062
404-978-2281 Direct
404-386-3682 Assistant Robin
678-760-6266 Buyer’s Agent Adam
770-973-9700 Office
bruce@locationlocationlocation.com
http://www.LocationLocationLocation.com
0 votes Thank Flag Link Sun Jan 6, 2013
It all depends on how much you want to leverage?

Are you thinking of attempting to purchase this Clairmont property for lease?

What has been your experience with real estate ownership, Joelle?

If you are in downtown Decatur during your next visit to GA, connect with me for a meeting. I'm sure that there are options that will work for you.
Web Reference: Http://intowninsider.com
0 votes Thank Flag Link Sun Jan 6, 2013
Good Morning,

You can still purchase vs. renting even in your situation. The terms aren't going to be what they would be with a bank loan, but you CAN purchase. Give me a call and I'll explain how. I look forward to your response and serving your housing needs.

Rhonda Haynes
The "HUD" Queen
Success Atlanta Real Estate & Investments, LLC
404-597-5506
0 votes Thank Flag Link Sun Jan 6, 2013
You will have to use private money. Minimum down is zero. Minimum rate around 9.5%. You'll have 3 to 5 years to refinance out. That's about how much time you'll have to wait to qualify for FHA. Make sure that the price point of the house is within FHA loan limits for the county you plan on living in. Each county has its limit. It takes about 30 days to close. Must have a job or some form of income to qualify. There is an application fee.
0 votes Thank Flag Link Sat Jan 5, 2013
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