Can I Buy A Home Again After A Short Sale?
Millions of Americans have went through a short sale in the last few years. If you are one of these people, you are not alone! The good news is that if you have short sold your house in the past, it is possible to get into a position to get a new loan in as little as only a few months after your short sale.
You read that right: some loan programs allow you to get into a new mortgage loan in as little as 12 months after a short sale.
Not everyone will qualify for a USDA loan after short selling their home last month, but it is possible. Ok, so enough about what is possible – what is realistic?
Buying a home again after a short sale and getting a mortgage is going to depend on what type of mortgage you are trying to qualify for. FHA guidelines are different than FNMA guidelines as far as getting a mortgage after short selling your home in the past and USDA and VA guidelines are even different still.
Buy Again After a Short Sale: Getting An FHA Loan
Getting an FHA loan after a short sale is one of the more common scenarios. FHA loans after a short sale have a waiting period that is less than Conventional but more than VA or USDA loans. The nice thing about FHA loans is that you don’t need to be a Veteran (VA loans require this) and you can buy your home in any area (USDA loans require that the property is eligible for a USDA loan).
FHA loans require that you pay up front mortgage insurance as well as a monthly mortgage insurance, but they are one of the most popular (and best) options for getting a mortgage after you have been through a short sale.
The waiting period for getting a FHA loan after a short sale is 3 years.
Buy Again After a Short Sale: Getting A Conventional Loan
When most people think about getting a conventional loan, they think that there is a requirement to put at least 20% down. While it is true that if you put 20% down with a conventional loan you can avoid paying mortgage insurance, it is not true that you are required to put 20% down in order to get a conventional loan.
There are a number of conventional loan programs that will allow you to buy a home with just 5% down by adding mortgage insurance on the loan and in some cases, it can be a better financial option than getting an FHA loan.
The waiting period for getting a Conventional loan after a short sale can be as little as 2 years.
With conventional loans, the waiting period after a short sale actually depends on how much money you are planning putting down as a down payment. If you put at least 20% down, it is 2 years. If you put less than 20% down, it is at least 5 years and as long as 7 years if you put less than 10% down.
Buy Again After a Short Sale: Getting A VA Loan
VA loans are popular with anyone who is a Veteran and is eligible for a VA loan. VA loans offer 100% financing and don’t require mortgage insurance. Getting into a VA loan after a short sale is common and it is is one of the easier loan programs to qualify for.
The waiting period for getting a VA loan after a short sale for most lenders is 2 years.
That said, for some VA lenders, the waiting period after a short sale can be as little as one month under the right circumstances. If you have not missed any mortgage payments prior to the final short sale and you have a 660 or higher credit score, there is a chance that you could get an automated underwriting approval and get a VA loan. Work with a loan officer who is a VA loan expert if you are in this situation.
If you have late payments prior to the short sale, expect most lenders to tell you that you are going to have to wait 2 years and have no late payments on any credit account in the last 12 months prior to applying for a VA loan.
Buy Again After a Short Sale: Getting A USDA Loan
The waiting period for getting a USDA loan after a short sale is X years.
Buy Again After a Short Sale: Getting A Jumbo Loan
Generally speaking, jumbo loans are going to be the hardest loans to qualify for after a short sale. If you are planning on getting a jumbo loan after a short sale, be prepared to wait the longest of any of the programs and put the most money down.
The waiting period for getting a jumbo loan after a short sale is 7 years.
Buying Again After a Short Sale: Get Approved Today
With so many different programs and so many different guidelines, the best way to get approved for a mortgage after a short sale is to speak with a lender who specializes in helping people get qualified that are in this situation. Many lenders have “portfolio products” that are not FHA, VA, USDA or Conventional loans and if you can find a lender who has one of these, many times that is your best option. Submit your information below and we will work hard to match you up with a lender who specializes in helping people in your situation so hopefully you can get approved for a mortgage and get into a new home today!