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Asked by EC, Santa Clara County, CA Fri Apr 17, 2009

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4
Grace Hanamo…, Agent, Cupertino, CA
Fri Apr 17, 2009
BEST ANSWER
Hello EC and thanks for your question.

At present, the most important criteria for determining loan "worthiness" starts with the FICO score. If your current "mid-score" (the FICO score average amongst all three reporting agencies) is less than 680, there may not be any affordable loan programs available to you at this time. Although short selling a home has far less consequences than a foreclosure in terms of damaging your FICO score (short sales reportedly cause a drop of between 75-95 FICO points, while a foreclosure can damage the credit score up to 200 points or more) , even if your score remains above 680, this event will require the broker to "explain" the circumstances and situation to a lender in order to obtain financing, and the consequences are that there may be a larger deposit, higher interest rate and Mortgage Insurance (MI) required if you are able to get another loan.

You are entitled to look at your credit report and see your FICO scores once each year by logging onto http://www.annualcreditreport.com. Follow the directions to get your credit report via the website or mail.

If you are truly interested in purchasing another home, despite the embarrassment and concerns you may have about relaying these circumstances to a mortgage broker, I encourage you to speak to a qualified real estate broker. Even if a broker cannot help you with a loan now, he or she can provide you with some guidance regarding the actions that should be taken over the next 12-24 months that will help repair your credit and increase your FICO scores so that, at the next opportunity, you will be able to qualify for a loan.

I wish you very good luck! If you need any additional assistance, please feel free to email or check out my website below.

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
1 vote
Robert Chome…, , San Diego, CA
Fri Apr 17, 2009
You can get approved with late payments on your credit cards. But you will need to wait 2 yrs since the short sale. Much will also depend on your credit score. But with FHA you can do a "manual underwrite" with very low score as long as there are compensating factors.
Web Reference:  http://socalfhahomeloans.com
0 votes
Nancy Gray, , Bayville, NJ
Fri Apr 17, 2009
Hello EC. I just attended a seminar on new mortgage guidelines and some time in the near future the FHA will establish guidelines that will not consider a 'short sale' on your credit report with the same negative marks as a 'foreclosure'. I do think that you will still need 1-2 years from the time of the 'short sale' and you will have to reestablish your credit before you will get approved for another mortgage loan. My suggestion would be to call the HUD hotline and ask this question or call on your local lender.
0 votes
X, , Kirkland, WA
Fri Apr 17, 2009
When was the short sale? Typically that is going to show up as a deed in lieu on your credit report. In most cases you need to be clear of this for at least 3 year per FHA guidelines.

As for credit cards, when were they? How many 30,60,90 lates? Were they after the short sale?
0 votes
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