Guidelines And Tips On Qualifying For Mortgage After Short Sale

Guidelines And Tips On Qualifying For Mortgage After Short Sale

This BLOG On Guidelines And Tips On Qualifying For Mortgage After Short Sale Was UPDATED On July 8th, 2018

Qualifying For Mortgage After Short Sale requires mandatory waiting period after short sale on government and conventional loans. Gustan Cho Associates has non-qm loans where there is no waiting period to qualify for mortgage after short sale.

  • A short sale is when a mortgage lender will approve a homeowner who has a mortgage higher than the value of their home sell their home
  • Lender will forgive the negative deficit of their mortgage loan balance
  • Short sales were extremely popular after the 2008 Real Estate and Mortgage Collapse
  • Home values has plummeted throughout the country after the real estate meltdown of 2008
  • Millions of homeowners were stuck in homes where they could not sell
  • This was because the balance of their loan was higher than the value of their homes
  • Lenders were offering short sales to homeowners with underwater mortgages in lieu of foreclosure
  • This is because they can close their books much sooner and avoid the lengthy and costly process of foreclosure

How Does a Short Sale Work?

Homeowner who are stuck in a home with a mortgage balance that is higher than the value of their home, may consider a short sale instead of foreclosure.

  • First step is homeowners need to ask current lender whether they will entertain a short sale
  • Most lenders will authorize a short sale instead of going through the process of foreclosure 
  • Foreclosure Process can take a very long time, cost thousands of dollars in legal fees, and take up hundreds of hours of work from the lender
  • Once the lender gives homeowners their blessings, they contact a realtor and have the realtor do a market analysis of the home
  • Homeowners get to choose their realtor of choice
  • Everything homeowners do during the short sale process they will need the approval of mortgage lender
  • Lender will review all the real estate purchase offers by potential home buyers
  • Lenders need to approve it and sign off on it
  • After listing the home and get a solid purchase offer, the offer need to submitted to lender for them to sign off on it
  • Short sales take substantially longer for a home buyer to close
  • Most home closings are closed in 30 to 35 days
  • A short sale home buyer may need to wait 90 days or more to close on their home purchase
  • This is because lenders take their sweet time.

Waiting Period Requirement In Qualifying For Mortgage After Short Sale

There are mandatory waiting period after short sale to qualify for a mortgage loan.

  • Qualifying For Mortgage after short sale for USDA and FHA Loans, the wait period is three years after the short sale date of their home
  • For conventional loans there is a four year waiting period to qualify
  • There is an exemption where there is no waiting period after short sale if homeowners have not been late with any mortgage loan payment until the date of final short sale date
  • Unfortunately, many folks do not meet this exemption
  • This because their lender will require that they skip a mortgage payment for their short sale to be effective
  • There are times where a lender will let the homeowner to be timely with their mortgage loan payment until the date of the short sale
  • If this is the case, there is no waiting period after a short sale to qualify for either a FHA Loan, Conventional Loan, VA Loan, or USDA Loan
  • Two year waiting period to qualify for VA Loan after short sale

Qualifying For Mortgage After Short Sale With No Waiting Period

Government and Conventional Loans have mandatory waiting period after short sale. There are many states such as Florida, Texas, Georgia, California, Illinois, Colorado where home prices has been increasing double digits since 2012 with no signs or correction. Many qualified home buyers are seeing home values appreciate before their eyes and cannot purchase a home because they do not meet the mandatory waiting period requirements. Gustan Cho Associates now offers non-qm loans where there is no waiting period requirements after short sale. 10% to 20% down payment is required. No maximum loan caps. No private mortgage insurance required. Mortgage rates are determined by borrowers credit scores and down payment. Amount of down payment depends on borrowers credit scores. Contact us at GCA Mortgage Group at 262-716-8151 or text us for faster response.

Related> Mortgage After Short Sale

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Related> New Fannie Mae Guidelines on Home Loan after Short Sale

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