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Buying a Home After a Short Sale is Possible!
A short sale is basically selling your property for less than the balance still due on the property. A short sale is often used as an alternative to foreclosure, but it is not the best option if it can be avoided as a short sale does have a negative impact on your credit score. Although you will probably not get the best rate in the market, this does not mean that you can’t look into buying a home after a short sale.
So what are my options?
You have a couple of options in this situation. You do qualify to apply for a conventional home loan after a two year waiting period and with a twenty percent down payment. A ten percent down payment after a four year period and a ten percent or less down payment in seven years. If you are trying for an FHA loan you’ll have to wait three years with a three and half percent down payment. These waiting periods start after the date of sale on the short sale listed on the credit report.
During this waiting period there are things you should do. You have time to rebuild your credit again and but together a plan to save for that down payment. The wait isn’t too long really; this option can get you in the position to buy a home after a short sale.
Buying a home after a short sale is very possible. Just be sure to do your homework, save money for a down payment and keep working on your credit rating. It does take a hit after a short sale. Build it back up as it will be in your best interests to raise that score as high as you can. It will give you a leg up once your waiting period is over and you start applying for a home loan.
A short sale is not the end your home buying dreams at all. These are the options out there for you. Give us a call or apply today, we are here to help!