How long after a short sale can I buy a home?

A short-sale does not affect your credit score as much as a foreclosure does, especially if you don't have any late payments. However most lender guidelines classify a short-sale the same as a foreclosure. For FHA, that timeline is 3 years. Here is the documentation directly from HUD on their 4155.1 REV-5 guideline form Chapter 2 page 6.

Previous Mortgage Foreclosure. A borrower whose previous principal
residence or other real property was foreclosed or has given a deed-
in-lieu of foreclosure within the previous three years is generally not
eligible for a new FHA-insured mortgage.

What's interesting is that a bankruptcy only needs 2 years to clear before qualifying for a new FHA loan.

Sincerely,
Cesar Meyer
Ryse Financial
800-785-6053
rysefinancial.com

My husband and I had to do a short sale, because of high medical bills. We need to move back to Ohio. Will a lending instution still give up problems? We have a fixed income that is not relient on a job. Is there any chance of getting another loan with-in 6 months. We own nothing except for a truck payment.

When did you short sale your property? You should remember that you won't be able to get a mortgage immediately after a short sale. You will have to wait for 2-3 years in order to get a mortgage after short sale.

i was late 120 day by misunderstanding on short sale that was completed back in March 2009, but we both have income/debt ratio and credit score of 700 so far. How long do we wait? 2 or 3 years to apply? Is there any documentation on this?

I know FHA has a handbbok with specific guidlines regarding loans. Does anyone know exactly what it says if anything about time frames for buying a house FHA after a short sale or foreclosure?

My wife and I had recently completed a short sale and we do have the over 120 days late on the first and second in our credit score. We were able to keep paying all our other credit lines and at the end it dropped our score from the 740s to about 630s last I checked. A lender friend of mine suggested that we rebuild our credit the next two to three years. He also said that because of the current housing slump and tightening be prepared t have at least 10% down and money in the bank good for 6 mos payment to be safe.

Hi Guest,

After a short sale, you would have to wait for at least 2-3 years in order to get a mortgage. If you have a good credit score and no further negative information in your credit report, you would be able to qualify for a loan after 2 years of a short sale.

Hi John,

As far as I know, after a short sale you'll have to wait for 2-3 years in order to get a mortgage. If you've gone through a foreclosure, then you'll have to wait for 3-4 years to qualify for a home loan.

To PatC,

Your lender friend is right in saying so. After a short sale, if you want to buy a property, then you should wait for 2-3 years. During this time, you will have to take steps to improve your credit score. You may check out the given page to know the steps to improve your score:
http://www.mortgagefit.com/credit-rating/credit-repair.html

Take care.

Thanks sara, I appreciate the reply. Best thing I can say to people going through this experience is keep everything organized and make sure to stick with your plan. Long term it would be beneficial especially if you want to be a homeowner again.

Lenders are treating short sales like foreclosures and the wait times are about the same.

The shortest wait time is FHA, which is 3 years. However, FHA JUST changed their guidelines where if the homeowner was NOT late on their mortgage at the time of the short sale, you can buy one day after the short sale. This is new for 2010.

I wrote a blog post covering all of the details on this:

"http://www.keaneloans.com/2009/12/22/how-long-do-i-have-to-wait-to-buy-a-house-after-a-short-sale/"

Hopefully this is helpful

[External linking deleted as per forum rules. Thanks.]

My sister is over 120 days late in her mortgage payment. her agent advised her not pay the mortgage to qualify for modification, in which in the end she did not qualify. She bought the house for $720,000 and it was recently appraised for $450,000. She decided to short sale the house. since her husband's name is not on the loan, can they purchase another house under the husband's name without waiting for the 2-3 years period.
did the agent advise my sister correctly not to pay the mortgage to qualify for the loan modifacation? it sounds unethical to me.

Hi marla,

It is not always mandatory to be delinquent on your mortgage payments in order to get a loan modification. If you can prove your financial hardship, the lender would modify your loan if you are current on your mortgage payments.

As the mortgage is solely in your sister's name, her husband would be able to qualify for a loan. He will not have to wait for 2-3 years period in order to qualify for a loan.

Take care.

Will the parent be affected the eligibility to buy a short sale home if their children had a short sale on their homes. They don't live in the same household.

Hi Everlyn!

Welcome to forums!

I have given my suggestions in regards to your query at:
http://www.mortgagefit.com/postdeal/about37201.html#159539

Take a look at it. Hope it helps you.

Sussane

Hi Guys, My question is, I have been trying to do a modification for 9 months. the bank is a joke as far as the time it has taken to get this done. When i call i get the run around and no one seems to know when the mod will be done. My mortgage adjusts in October, and i am trying to decide whether to just short sale it now or keep my fingers crossed that the mod will be done by October. Any thoughts?

Welcome Ryan,

If you want to get rid of the property, then you can go ahead with the short sale. In that case, it doesn't make sense to wait for a modification. However, you should note that in case of a short sale, you would be liable for paying off the deficient balance resulting from the sale.