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
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.
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.
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:
â€¢ A previously owned property was sold for less than what was owed (short sale), or
â€¢ There is a principal write down of indebtedness that cannot be re-financed into a new mortgage (short pay off).
As outlined below, borrowers are not eligible for a new FHA loan if
â€¢ 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:
â€¢ The borrowers were current on the mortgage and other installment debts at the time of the short sale, and
â€¢ 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.
Rodney Mason, NMLS #151088
Sr Loan Officer
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
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) | HomePathÂ® | HomePathÂ® Renovation | HomeStyleÂ® Renovation | VA | USDA | GA Dream | Jumbo Financing.
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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.
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.
The "HUD" Queen
Success Atlanta Real Estate & Investments, LLC