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Life After Short Sales

 

Life after a short sale is going to be different for everyone.  The two of the most common questions that arise are:

  1. When will I be able to buy a home again?

  2. What is this going to do to my credit?

As of December 16th, 2009, the Federal Housing Administration guidelines say that homeowners may purchase again if:

  1. the borrower is current with there mortgage at the time of the short sale.
  2. the proceeds of the short sale serve as payment in full.

Borrowers may not qualify for a new FHA mortgage if:

  1. it seen as simply taking advantage of a down market
  2. the purchase is at a reduced price for a similar or superior property within a reasonable commuting distance.

For more information, click here.

For short sale sellers who did miss payments, they will be allowed to  purchase again in 3 years from the date of the closing of their previous property.  If you were to allow the property to go through foreclosure, this time frame will be 7 years.

As for your personal credit score after a short sale, this will all be depend on how many payments were reported as missed prior to closing on your short. These can be the most damaging to a score.  After a short sale is completed, I recommend that my sellers have a free consultation with a credit repair company.

 

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