Is it possible to get a mortgage loan after a short sale?
Studies reveal that short sales and foreclosures comprise about half of real estate sales as more and more buyers are not being able to repay their mortgage loans and retain their homeownership rights. Spring 2013 saw a large number of real estate sales as more and more buyers snatched homes at lower prices than the actual. When you’re about to face foreclosure and you can’t afford a home, you might as well qualify for a short sale, even when you don’t think that you can sell off your home. You must be wondering how you could get into a good short sale deal with your mortgage lender. You will need certain amount of patience, fortitude and a lot of good fortune in order to complete a short sale. Read on the concerns of this article to know more on a short sale.
Short sale – What is it and how does it work?
When you take the decision of selling your home for an amount which is much less than what you owe to the mortgage company, this is called a short sale. Buying a real estate property that is sold through a short sale is certainly different from buying a home which is owned by the bank, known as real-estate owned property or a property that has been in foreclosure. This process is also called a pre-foreclosure sale and when your mortgage company agrees to a short sale, you can easily sell off your home and pay off the mortgage balance with the proceeds. A short sale can be a lucrative alternative to foreclosure when you’re:
- Ineligible to modify your mortgage or opt for a refinance
- Behind on your monthly mortgage payments
- Underwater on the mortgage loan
- Not being able to sell off your home at a price that covers what you still owe on the loan
- Facing dire financial straits
- No longer being able to afford your home and you need to leave right now.
Getting a home loan after a short sale – Is that possible?
When you’ve already gone through a short sale, this doesn’t mean that you have to put an end to the dream of home ownership. All underwater homeowners who sell off their homes for less than what they owe are actually able to qualify for a home loan. A second try to owning a home won’t happen overnight and hence you need to make a lot of calculations through a home mortgage calculator in order to know whether or not you can immediately qualify for such a loan. Today’s lending environment is extremely tight and this is why most homeowners tend to think that it is almost impossible to qualify for a home loan after a short sale. But there is certainly a ray of hope even after a short sale. Here are the minimum requirements to grab a loan after a short sale.
- The short sellers usually have to wait for at least 2 years after closing the short sale to get a mortgage loan.
- The short sellers usually have to wait for 4 years with a 10% down payment on your next mortgage loan.
- The short seller has to wait for 7 years if he pays down an amount which is even less than 10% of the loan.
For getting FHA loans, you have to wait for a 3 year waiting period since the closing date of the short sale. Meanwhile you can try your best to repair your credit score in order to become a favorite among your lenders yet again and get a mortgage loan within your means.