Have you completed a short sale in the past few years? Are you interested in buying after a short sale on your home? Want to know the short sale seller purchasing options available to you? There are many homeowners who fell on hard times and the only option they had was a short sale on their homes. It’s important to know the guidelines for a new purchase after a short sale as those terms have recently changed.
It used to be that short sale homeowners could purchase a homes and get a loan two years after the completion of their short sales. That is no longer the case. Most lenders follow the Fannie Mae guidelines which now state that a buyer will have to wait four years before they can qualify for a loan. There are some extenuating circumstances which may allow borrowers to qualify after two years such as an unexpected, huge, and extended decrease in income that left the borrower with no other reasonable choice but to default on their loan. That is a really high standard to reach and most borrowers will not qualify for that standard.
So, how do you finance a home two years after your last short sale? Check out the guidelines at your local credit union or community bank which may be able to review your income, savings, job history and the terms on which your short sale occurred. There’s a big difference between whether the short sale was an isolated event, one of several or caused by issues that were not in your control.
Another option is using a private lender or hard money lender. Those lenders will charge you a much higher rate of interest for a short period but at least you’ll be able to get back into the market, have some equity in a home of your own and refinance in two years with the appreciation that you’ll have in the home.
The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.
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