How long would it take to qualify for a new morgage after a

Hi Kelly,

If you successfully complete a short sale, you may qualify for a new loan at a reasonable interest rate in as little as 18 months. So, if you plan to buy a home in the future, then doing a short sale is the better option.

Defaulting on a mortgage is considered foreclosure whether you do a short sale, deed in lieu, or just stop making payments until they kick you out of the place.

In other words, the credit impact is the same.

What's different is whether or not there are additional monies the lender can come after you to collect. In a short-sale, the lender can't sue you for the loss on the loan whereas they can in a normal foreclosure.

Depending on your situation you can qualify for some loans right out of foreclosure and other loans require 4 years. Not knowing enough about your income, employment and assets it is impossible for someone to answer that question.

I suppose the better question is how long until you can afford to make a mortgage payment without having to resort to a short sale to get out of it?

You must be having financial problems because of which mortgage payments have become difficult and you are looking into short sale as an option.

Now after a short sale happens you will have improve your credit, financial position and only when you are sure that you would be able to afford house payments, look at buying the new house.

Developing good reserves, improving credit score, getting back financial stability generally takes time and you will have to wait for some years before you make the new purchase.

As Ken said, to get good rates, you need to wait for around 4 years, this time can be utilized to improve credit history, and regain financial stability. If you don't make proper calculations and go for another mortgage to soon, you might be in similar spot again where losing the home becomes a reality.

ACCORDING TO YOUR REPLY ABOVE, AFTER SHORT SALE ONE CAN BUY A HOUSE AFTER 18 MONTHS..HOW ABOUT IF CREDIT SCORES WENT DOWN BECAUSE OF MORTGAGE DEFAULTS BEFORE SHORT SALE???
THANKS!!!

It really depends on the damage to your credit report such as if forclosure was filed, late payments, etc. I would figure at least 2 years before being able to purchase again.

I have had 3 Lenders try to qualify me for a Mortgage Loan...The situation is this. I did a short sale on my last home in October of 2008, I have been renting without any late payments or any of my other debt, my husband and I both work and can qualify for a loan, however the 3 Lenders who took a look at my credit says because it states "Creditor settled less than owed" I cannot get a loan for 2 to 3 years. I need help and am ready right now to purchase a home it is coming up on a year. What can I do ...I appreciate the help

Hi

Most of the lenders would want you to wait for at least 2-3 years to qualify for a new loan. If you want to go for a conventional loan the waiting period may go upto 4 years. It will also be taken into consideration whether you had any late payments prior to the short sale. So, if you had stopped your payments before the short sale you will find it difficult to qualify for a loan.

by your problem, i thing you have finanicial problem.you keep in mind that for new mortage loan you should have sufficent credit.
if you have sifficent credit then not an issue.

if you can't qualify for a regular mortgage thn you can go throuth second mortage.this mortage provide you fast cast and you can't qualify for regular bank financing. a second mortgage is more expensive.
a second mortgage is provided by private companies or individual investors.

for better way you go through mortgage broker so you will not get problem.they will provide you all necessary step.

thanks
hari

lots of shotgun responses to your question.........i think you will need to wait at least 2-3 years before a company will qualify you. Not to mention that credit scores need to be much higher than in the past to qualify and larger down payments......the days of 100% financing and 620 credit score are over. To the poster that said you will have an easier time qualifying for a new loan if you continued to make your mortgage payments up until the short sale obviously does not know what they are talking about.........a company will not even start the short sale process with the seller until they are at least 3 plus months in default.

If you're focused on rebuilding your credit, there are a number of things you can do - some of them very simple.

Secured credit cards for example are a good and easy tool to help get your creditscore up.