Selling short, how long before you can buy another home?
I got caught in the real estate downturn and purchased my home in 2005. I currently owe a lot more than its value. Is there a possibility that we could sell it via short sale and buy another less expensive home? In other words, could I get a loan? Tim
I am sorry for your dilemma. As a real estate agent, I hear this scenario quite often. FHA has recently waived their rule requiring a three year waiting period (after a short sale to obtain a new loan). An FHA loan is a Federal Housing Administration insured mortgage which is offered by an FHA approved lender. FHA insured loans typically require less stringent underwriting guidelines (easier for borrower to qualify).
Yes, there is a possibility for you to qualify for a new mortgage, but certain criteria must be met:
1) You must be current on your mortgage and all other credit obligations for the previous 12 months.
2) There must be an actual hardship, such as loss of job, job transfer/relocation, catastrophic medical bills, and or/death of an immediate family member.
3) You must be downsizing.
4) Your current lender must approve the short sale.
5) Your credit score must be a minimum of 620 and if you have any outstanding collections accounts, they must be paid through escrow.
Short Sales can be extremely complex, be certain to contact a Realtor® experienced with short sales so that you may begin the process.