Home Buying in Columbus>Question Details

joyliles, Home Buyer in Columbus, OH

Is it true that if we short sell our home we will not be able to purchase a new home? Will renting an apartment be our only option?

Asked by joyliles, Columbus, OH Wed Jan 30, 2013

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Jason Opland’s answer
First and foremost it is important to understand that there aren’t any restrictions on buying a home after a short sale, just on getting a home loan after a short sale. You certainly are free to purchase a home, you’ll just need to find a very flexible lender (which could be tough) or purchase the home with cash.

Obtaining financing through the traditional sources will be difficult as the majority of financing currently available right now is subject to either Fannie Mae or FHA guidelines, both of which restrict lending to homeowners with a short sale in their credit history.

Short sales and foreclosures negatively impact your credit, and bad credit implies that you as a borrower represent a higher credit risk which in turn hurts your chances of securing a mortgage. The logic is, if you weren’t able to make your payments just a year ago, you’re still considered a risky candidate for a new loan today. Here are the guidelines:

WAIT TIME AFTER A SHORT SALES
FHA- 3 year waiting period

VA- 2 year waiting period

Both FHA and VA require clear Caviers (Credit Alert Interactive Voice Response System)


Conventional
2 year waiting period at 80% ltv*

4 year waiting period at 90% ltv *

WAIT TIME AFTER A FORECLOSURE
FHA -3 year waiting period

VA - 2 year waiting period

Both FHA and VA require clear Caivrs

Conventional
7 years waiting period- all ltv’s

3 years with extenuating circumstances

Additional requirements after 3 years up to 7 years.
90% Max LTV
Purchase, Principal Residence
Rate and Term Refinance, all occupancy

Note on FHA only- SHORT SALE WITH NO MORTGAGE LATES
No waiting period if there were 0 late payments throughout the entire Short Sale process and the borrower is relocating to another area.

For more info visit http://columbusrealestatenews.featuredblog.com/waiting-perio…

Jason Opland
Better Homes and Gardens Real Estate
614.332.6984
jasonopland@msn.com
0 votes Thank Flag Link Wed Jan 30, 2013
CFS Mortgage, http://www.cfsflex.com, has a flexible loan program. They allow a mortgage after a foreclosure, short sale, or chapter 7 bankruptcy. There is only a six month waiting period. This is perfect for individuals looking to become homeowners again.
0 votes Thank Flag Link Sun Aug 4, 2013
It will depend on your short sale, terms with bank, and what their particular details surrounding your loan payoff would be. Typically a short sale will prohibit buying another home for a minimum of 3+ years and perhaps several more. It will show on your credit that a loan was not satisfied. You will likely not be able to procure a loan with an unsatisfied loan or judgement.

Many people want to 'short' sale their home simply because they are upside down. A bank will often want to see evidence of a hardship to justify not making payments. This would be circumstances such as health, death, loss of income/job, etc.

It is never advisable to just stop paying your mortgage if possible. Talk to your lender and see what options exist to have your loan motified to a lower rate, term, etc.

Other than short sale of the property you can consider leasing it. If you lease for 2 yrs and show income from it, you may usually use this to buy however you would have to rent yourself during that period. Hope that helps and good luck to you.

~Todd
0 votes Thank Flag Link Wed Jan 30, 2013
That is a difficult question to answer because we do not know the circumstances surrounding your Short Sale.

In most cases, there will be a waiting period before you can qualify for a new mortgage. The time period may vary depending on your hardship. Certainly if you have the resources to purchase another home it is unlikely your current debtor will grant you a short sale without conditions.

The best person to discuss this with is your attorney and perhaps a knowlegable loan officer.

But, I would prepare myself to become a reanter.
0 votes Thank Flag Link Wed Jan 30, 2013
That is true, you will have to wait 3 years to buy. You could rent an apartment or a house, but that will not be easy either with a bad credit rating.
0 votes Thank Flag Link Wed Jan 30, 2013
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