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Steps to Home Ownership after Short Sale
- During the Short Sale Process be sure to save your paperwork. Common requested items in requesting a home loan after short sale include Settlement Statements and the letter from the bank stating the loan has been released and they are not coming after you for the balance.
- Pull your credit report. You want to see how the bank reported this on your credit. Also be sure there are no other outstanding items, the time to rebuild your credit is now!
- Work to get your credit score back up and your debt to income ratio back down. Pay down items and be mindful not to get additional deficiencies.
- Save every penny you can, you will need money for a down payment. The quicker you save the sooner you will be a homeowner again.
- Wait patiently and stay positive.
After two years with 20% down you may
purchase a home with a conventional loan. Be prepared to dig up your paperwork,
write letters and search different loan officers (I recently had a client that was
told no by 5 loan officers, only to get approved after the 6th) that
will be able to pull this together. With 20% down you will also avoid paying mortgage
insurance and you will walk into equity!
After three years you may purchase a
home with FHA with 3.5% down.
VA requires a wait of 2 years.
Good luck!
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