When Can I Buy Again after a Short Sale?

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mortgageporter-thinkingI received this question from on of our readers over the weekend:

Hi Rhonda, I completed a short sale in Sept 2012, looking to repurchase.  I know that Fannie Mae just extended their post short sale repurchase guidelines to a waiting time of 4 years.  What other options do I have?  I have enough for downpayment and FICO around 720ish.  Thanks!

Wait periods for Fannie Mae were extended to 4 years from 2 years for short sales in late July 2014 regardless of how much down payment a borrower has. This also applies to deed in lieu of foreclosure and/or pre-foreclosures.

Good news! FHA, USDA and VA loans are all possible options for you. FHA is probably the most popular mortgage program after a short sale since there are no income limits and the property does not have to be in a designated rural area, as required for a USDA loan and VA loans are only available to our Veterans.

Although you have down payment, regardless of how much funds you put “down” on an FHA loan, it will have both upfront and monthly mortgage insurance. If you are disciplined, you might want to consider putting enough down to where your payment is where you feel comfortable and save the remaining funds for reserves (please consult with your mortgage professional and financial planner).

You should be eligible to refinance out of the FHA loan and into a conventional mortgage after the 4 year wait period from the short sale closing date is over.

If you’re considering buying a home located anywhere in Washington state, and you’ve had a short sale or foreclosure and are “waiting” to be able to buy again, I’m happy to work with you and help you develop a game plan for your next home purchase.

PS: Be sure to check out my slide book: Buying a Home Again

 

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