This Article On Mortgage After Short Sale Guidelines For Home Purchase
Previous homeowners who had a prior short sale can now qualify for a mortgage after a short sale as long as they have met the mandatory waiting period after a short sale.
- Many homeowners have requested a short sale from their current lender as an option to avoid foreclosure
- A short sale is when a homeowner gets the blessing of their lender to sell their home below the amount of their mortgage balance
- Short sales are selling a home that is worth less than the balance of their loan balance
- Most lenders grant and approve short sales to homeowners who cannot afford their mortgage payments
- This because it saves time and money of taking the homeowner through the foreclosure process
Plus with short sale homes, lenders will get much more money from the sale of their assets than it would for paying for the expenses of the foreclosure process.
Housing Market After The 2008 Housing Meltdown
The real estate collapse of 2008 has left millions of homeowners with underwater mortgages where:
- Many homeowners were stuck in homes are worth significantly less than the balance of their home loan
- Every year, there are approximately 400,000 short sale homes closed
- Each year, there are tens of thousands of previous short sale homeowners re-entering the housing market as new home buyers
- Homebuyers can qualify to purchase a new home after a short sale
- However, it depends on several factors
In this article, we will discuss and cover Mortgage After Short Sale Guidelines For Home Purchase.
Waiting Period For Mortgage After Short Sale Guidelines
All mortgage programs have different waiting period requirements to qualify for a mortgage after a short sale.
- For FHA and USDA Loans there is a three-year mandatory waiting period to qualify for a mortgage after a short sale
- The waiting period clock starts from the date of the short sale that is reflected on the HUD Settlement Statement
- Homeowners who have been current on a mortgage payment for 12 months up to the date of the short sale, there is no waiting period to qualify for a mortgage
- Unfortunately, most lenders will not approve a short sale unless homeowners have skipped that last mortgage payment
- To this date, I have never ever seen a short sale homeowner who has been timely on their mortgage payment up to the date of the short sale
- This is not because they did not or could not pay but was instructed by their lender that they needed to miss that last mortgage payment in order for them to do a final approval on the short sale
The 12 months on-time mortgage payments and all other payments of the short sale homeowner needed to have been current for 12 months up to the date of the short sale in order for the no waiting period after a short sale to be effective.
Waiting Period After Short Sale On VA Loans
For VA Loans, there is a mandatory period of 2 years to qualify for mortgage after short sale.
- Like FHA loans, there is no mandatory waiting period to qualify for mortgage after short sale if the homeowner has been timely on their mortgage payments
- To qualify for this exemption, veteran borrowers need to have been timely on all other payments for 12 months until the date of the short sale
The U.S. Department Of Veteran Affairs (VA) has a two year waiting period after foreclosure, deed in lieu of foreclosure, and Chapter 7 Bankruptcy.
Fannie Mae Waiting Period For Mortgage After Short Sale
Fannie Mae has announced new FANNIE MAE implemented and new MORTGAGE AFTER SHORT SALE Guidelines.
- New Fannie Mae mortgage after short sale guidelines and deed in lieu of foreclosure is 4 years with 5% down payment
- The old Fannie Mae Guidelines with regards to a waiting period to qualify for a mortgage after short sale guidelines and/or deed in lieu of foreclosure was 2 years with 20% down payment
- The mortgage after short sale guidelines and deed in lieu of foreclosure 2-year waiting period program is no longer in effect
Fannie Mae’s waiting period requirements to qualify for a conventional loan after a foreclosure is 7 years from the date of the foreclosure.
Government And Conforming Guidelines On Mortgage Included In Bankruptcy
Government and Conforming Guidelines for homebuyers to qualify with a prior mortgage included in Chapter 7 Bankruptcy is as follows:
- For FHA, VA, USDA Loans (Government Loans), if prior homeowners had mortgage included in Chapter 7 bankruptcy, the waiting period start clock begins from the date the housing event has been finalized.
Here is an example on waiting period start date on government loans if the homeowner had mortgage included in Chapter 7 Bankruptcy:
- Mortgage included in Chapter 7 Bankruptcy and discharged date was 1/10/2012
- A mortgage that was included in Chapter 7 Bankruptcy had finalized with foreclosure on 1/10/2018
- This particular borrowers waiting period started on 1/10/2018
- Would not qualify for FHA and/or USDA Loan until 1/10/2021 and would not qualify for VA Loan until 1/10/2010
For conventional loans, borrowers with mortgage included in chapter 7 bankruptcy, the waiting period is 4 years from the discharge date of Chapter 7 bankruptcy discharged date and the minimum down payment required is 5%:
- The housing event date does not matter
Here is an example on waiting period start date on conventional loans if the homeowner had mortgage included in Chapter 7 Bankruptcy:
- Mortgage included in Chapter 7 Bankruptcy and discharged date was 1/10/2014
- A mortgage that was included in Chapter 7 Bankruptcy had finalized with foreclosure on 1/08/2018
- This particular borrowers waiting period started on 1/10/2012
- This borrower would qualify for Conventional Loan as of 1/10/2018 because that would be the four-year anniversary date of their Chapter 7 Bankruptcy discharged date
- The finalized housing event date of the foreclosure does not matter since the mortgage was included in the Chapter 7 Bankruptcy
- The mortgage cannot be reaffirmed
No Waiting Period After Housing Event
Gustan Cho Associates Mortgage Group has an alternative financing loan program called non-QM loans where there is no waiting period after the following:
- Short Sale
- Foreclosure
- Deed In Lieu Of Foreclosure
- Bankruptcy discharged date
10% to 20% down payment is required. There are no maximum loan limits. There is no private mortgage insurance required. Contact us at 800-900-8569 for more information or text us for a faster response. Or email us at gcho@gustancho.com.
Re-Established Credit Required Besides Waiting Period
Besides meeting the mandatory waiting period, both all government loan and Fannie Mae/Freddie require no late payments after a bankruptcy, deed in lieu of foreclosure, short sale, or foreclosure. Mortgage lenders want to see re-established credit and perfect payment history.
- Overdrafts in the past 12 months are not allowed
- Verification of Rent, VOR, is required on all FHA and VA manual underwriting
- Rental Verification with less than 5% payment shock is considered a great compensating factor
Borrowers with prior short sale and need to qualify for a mortgage loan with a five-star national mortgage company with no overlays on government and conventional loans, please contact us at Gustan Cho Associates Mortgage Group at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com.
I need a loan to do 1031 exchange on investment property. Loan around 650 with 20 percent down. Short sale dec 2013
There is a four year waiting period after a short sale and/or deed in lieu of foreclosure to qualify for any conventional loan. There may be alternative financing that I may help you with such as private money loans or hard money loans. Please contact me at 262-716-8151 to discuss other alternative financing.
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DO YOU NEED A LOAN?
Are you a business man or woman? Are you in a financial mess or do You need funds to start your own business? Need to pay loans Their Debt or pay off your bills or start a nice business? Do you have a low credit score and you will find it hard to get Capital loan from local banks / other financial institutions? You need one Loan or funding for any reason such
a) Personal Loan, Business Expansion,
b) Business Start-up, Education,
c) Debt Consolidation,
d) Hard Money Loans
We offer loan at low interest rate of 2% and with collateral and not Collateral, we offer personal loans, debt consolidation loans, venture capital Capital, business loan, education loan, mortgage or Loans for any reason”.
However, our method offers the possibility to specify the amount of the loan needed and also the duration you can afford it, gives you a real Chance get the funds you need!
I missed three payments on my mortgage and had a shortsale in 2010. I want to buy a house again, and am qualified for 15 yr FHA with 22% down. Just found out that MIP is now mandatory on all FHA.
Can I still qualify for conventional loan, possibly 15 yr 20% down?
What would my DTI have to be?
If you had a short sale in 2015, you can qualify for both a FHA Loan with 3.5% down payment as well as a conventional loan with 5% down payment. It is up to you whether you choose the 15 year fixed rate mortgage or 30 year fixed rate mortgage on either FHA Loan or conventional loan. 15 year mortgage rates have lower mortgage interest rates than 30 year fixed rate mortgage loan programs on both FHA Loans and Conventional Loans. Debt To Income Ratio requirements on FHA Loans are 56.9% DTI if your credit scores are 620 FICO or higher and 43% if your credit scores are under 620 FICO. Minimum credit scores to qualify for FHA Loans are 580 FICO for a 3.5% down payment FHA insured mortgage loan. You can qualify for FHA Loans with under 580 FICO credit scores but you would need 10% down payment. All FHA Loans require FHA mortgage insurance premiums. 30 Year FHA Loans FHA Mortgage Insurance Premium is set at 0.85% annual FHA Mortgage Insurance Premium and with 15 Year FHA Loans the FHA Annual Mortgage Insurance Premium is 0.45%. All FHA Loans require upfront FHA Mortgage Insurance Premium of 1.75%, a one time fee which can be added on the balance of the FHA Loan. Mandatory waiting period to qualify for FHA Loan after a short sale is 3 year waiting period and mandatory waiting period to qualify for a Conventional Loan after a short sale is four years from the date of short sale. Conventional Loans with less than 20% down payment require private mortgage insurance which is paid by the borrower. Conventional Loan Borrowers do not have to pay private mortgage insurance with less than 20% down payment if they choose Lender Paid Mortgage Insurance, also called LPMI, which is available to conventional loan borrowers in lieu of a slightly higher conventional mortgage interest rate. From what you stated, you should be set to go. Please call me at 262-716-8151 or email me at GLCProperties@aol.com if you have any additional questions. Hope this response answers all of your questions.
Gustan Cho NMLS 873293
Sales Manager
The Money Store
262-716-8151
GLCProperties@aol.com
https://www.gustancho.com
DO YOU NEED A LOAN?
Are you a business man or woman? Are you in a financial mess or do You need funds to start your own business? Need to pay loans Their Debt or pay off your bills or start a nice business? Do you have a low credit score and you will find it hard to get Capital loan from local banks / other financial institutions? You need one Loan or funding for any reason such as:Email: eloanpro1@gmail.com
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d) Hard Money Loans
We offer loan at low interest rate of 2% and with collateral and not Collateral, we offer personal loans, debt consolidation loans, venture capital Capital, business loan, education loan, mortgage or Loans for any reason”.
However, our method offers the possibility to specify the amount of the loan needed and also the duration you can afford it, gives you a real Chance get the funds you need!
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Chief Executive Officer
Chief Operating Officer
Hard Money Capital Group
http://www.hardmoneycapitalgroup.com
847-561-0217
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