If you have gone through a short sale, you may be wondering, how long after a short sale can I buy a home?
The good news is that purchasing a home after a short sale is possible, depending on how the sale happened.
If you’ve gone through a short sale, you might think purchasing a home is going to take a long time. Depending on what you are buying and how the financing is arranged, you might be able to get a new home as soon as you can find one and close on it.
How Long After a Short Sale Can I Buy a Home? – The Fastest Way
The fastest way into a new home is to find one with owner financing. That way you don’t have to try to find a mortgage. You negotiate directly with the owner on payments, length of the mortgage, interest, taxes and insurance.
There are no real guidelines for owner financing because this is done outside the commercial financial industry. If you do choose this route, it’s best to hire a real estate lawyer to do a title search and check the mortgage paperwork. The attorney is your guarantee that you will own the home free and clear when you pay the mortgage off.
How Long After a Short Sale Can I Buy a Home? – If You Want Conventional Financing
If you are looking for conventional financing for purchasing a home after a short sale, then you will have to wait. How long you wait depends on where you go for a mortgage and how much of a down payment you have. Conventional lenders often take their cue from the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac, the two quasi-federal agencies which support traditional mortgages.
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How Long After a Short Sale Can I Buy a Home? – FHA Rules
If the FHA has insured the loan on your short sale, it takes three years to be able to purchase a home if you were behind or missing a mortgage payment. The clock starts ticking when the short sale shows up in FHA paperwork. If you did not miss a payment and stayed current for 12 months, there is no waiting period.
How Long After a Short Sale Can I Buy a Home? – Fannie Mae
The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae dates back to the Great Depression, when many Americans lost their homes to foreclosure. Until then, home loans had short repayment terms (i.e. five years), with a large balloon payment due at the end. Fannie Mae made it possible for lenders to offer long-term, fixed-rate loans which made home ownership possible for more Americans.
Fannie Mae recently released new guidelines for purchasing a home after a short sale; three percent down with a four-year wait. If the home went to foreclosure before a short sale, this rule does not apply.
How Long After a Short Sale Can I Buy a Home? – Freddie Mac
The Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Freddie Mac, has two different rules for purchasing a home after a short sale.
- If you had to go a short sale because of financial problems you could not control, the wait period is 24 months. You have to build up a good credit file during those two years. The best example of extenuating economic woes is a medical emergency.
- If your money woes are the result of bad decisions on your part, then the wait period is 48 months. Examples of this are: non medical bankruptcy and foreclosure.
Freddie Mac recommends beginning the mortgage shopping process two years after a short sale, regardless of why you went through a short sale.
How Long After a Short Sale Can I Buy a Home? – Veteran’s Administration
The Veteran’s Associations (VA) does have a home loan program for honorably-discharged veterans and spouses of veterans. The VA has a two-year wait for purchasing a home after a short sale if you missed a payment or were late. If you stayed current on the mortgage, there is no waiting period.
How Long After a Short Sale Can I Buy a Home? – Conclusion
If you’ve been wondering ‘how long after a short sale can I buy a home?’, then I hope I have been able to provide you with some attractive options. Owner financing can get you into a new home faster, but if you choose the conventional route through a lender, the wait to qualify isn’t as long as you may have thought.
Want to learn how you can make big profits from bargain real estate? Would you like to buy homes for pennies on the dollar? Or earn double-digit interest rates? Learn how to secure your financial future with this FREE mini class today!
