Getting Mortgage After Short Sale: 2015 Guidelines
Previous homeowners who had a prior short sale can now qualify for a mortgage after short sale as long as they have met the mandatory waiting period after short sale. Many homeowners have requested a short sale from their current mortgage lender as an option to avoid foreclosure. A short sale is when a homeowner gets the blessing of their mortgage lender to sell their home below the amount of their mortgage balance because the value of their home is worth less than the balance of their mortgage loan balance. Most mortgage lenders grant and approve short sales to homeowners who cannot afford their mortgage payments 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 asset than it would have through the foreclosure process. The real estate collapse of 2008 have left millions of homeowners with underwater mortgages where their homes are worth significantly less than the balance of their mortgage 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. Home buyers can qualify to purchase a new home after a short sale, however, it depends on several factors.
Waiting Period For Mortgage After Short Sale: 2015 Update
All mortgage programs have different waiting period requirements to qualify for a mortgage after short sale. For FHA insured mortgage loans, there is a three year mandatory waiting period to qualify for a mortgage after short sale. The waiting period clock starts from the date of the short sale that is reflected on the HUD Settlement Statement. If you have been current on your mortgage payment for 12 months up to the date of the short sale, there is no waiting period to qualify for a mortgage after short sale. Unfortunately, most mortgage lenders will not approve a short sale unless you 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, not because they did not or could not pay but was instructed by the mortgage 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 month 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 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 and all other payments for 12 months until the date of the short sale.
2015 Fannie Mae Waiting Period For Mortgage After Short Sale
Fannie Mae has announced new 2015 FANNIE MAE WAITING PERIOD GUIDELINES TO QUALIFY FOR MORTGAGE AFTER SHORT SALE. 2015 New Fannie Mae Guidelines on Waiting Period to qualify for a mortgage after short sale and deed in lieu of foreclosure is 4 years with 5% down payment. The old Fannie Mae Guidelines with regards to waiting period to qualify for mortgage after short sale and/or deed in lieu of foreclosure was 2 years with 20% down payment. This program is no longer in effect. Fannie Mae waiting period requirements to qualify for a conventional loan after a foreclosure is 7 years from the date of the foreclosure.
2015 HUD And Fannie Mae Guidelines On Mortgage As Part of Bankruptcy
Great news from FHA and Fannie Mae for those homeowners who had their mortgage as part of bankruptcy. For FHA Loans, if you had a mortgage as part of bankruptcy, the waiting period is 2 years from the discharge date of your bankruptcy. For conventional loans, if you had a mortgage part of bankruptcy, the waiting period is 4 years from the discharge date of your bankruptcy and the minimum down payment required is 5%.
Re-Established Credit Required Besides Waiting Period
Besides meeting the mandatory waiting period, both HUD and Fannie Mae require that mortgage loan applicant has not had any 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 is not allowed. Verification of Rent, VOR, is required by many mortgage lenders and is a great compensating factor. If you had a prior short sale and need to qualify for a mortgage loan, please contact me at 262-716-8151 or visit me at www.gustancho.com.
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