Want to Purchase a Home After a Short Sale, Foreclosure or Bankruptcy?

What you need to know when buying a home after a short sale, foreclosure or bankruptcy.

A common question sellers from a short sale, foreclosure or bankruptcy have now that they want to re-purchase a home today is, “How long must I wait before obtaining financing after short sale,  foreclose or bankruptcy?”

An important step prior to purchasing is planning ahead. You should begin looking at your credit report at least 6 months prior. 1 year would be even better to have additional time to see if you need to raise your score or fix any wrong information in your credit report. A great resource to getting your credit report, which is a free service is: www.AnnualCreditReport.com. This is a free service provided by the 3 major credit bureaus. You can obtain your credit report free once a year. To obtain your credit score there is a small fee around $12.

With a little patience and planning, you can re-qualify to purchase a home in this low priced real estate market with historically low interest rates!

Below is an overview by loan type of the financing choices you have.

All Loan Guidelines for 2012

Conventional – Fannie Mae

FANNIE MAE
Bankruptcy (Ch.7 or 11)	4 years
Chapter 13 Bankruptcy	2 years from discharge date. 4 years from dismissal date.
Multiple Bankruptcy Filings	5 years if more than one filing within the past 7 years
Foreclosure	7 years-after a prior foreclosure to be eligible for a new mortgage loan eligible for sale to Fannie Mae, unless the foreclosure was the result of the documented extenuating circumstances, which only requires a 3-year waiting period (with additional requirements)
Deed-in-Lieu of Foreclosure	2 years-80% max LTV ratios*
Preforeclosure Sale	4 years-90% max LTV ratios*
Short Sale	Greater LTV’s can require up to 7 years

 

 

 

 

 

 

 

 

 

FHA Guidelines

FHA
Chapter 7 Bankruptcy	2 years from discharge date
Chapter 13 Bankruptcy	1 year of the payout must elapse and payment performance must be satisfactory-buyer must receive permission from the court to enter into mortgage.
Foreclosure	3 years from completion date.
Short Sale	3 years from the date of the short sale.
	No time restriction if:
	1. The borrower paid all mortgage and installment payments as agreed for the 12 months prior to the short sale
	2. The borrower is not taking advantage of the declining market to obtain a similar or superior home in the same general area.

 

 

 

 

 

 

 

 

VA Guidelines

VA
Chapter 7 Bankruptcy	2 years from discharge date.
Chapter 13 Bankruptcy	1 year of the payout must elapse and payment performance must be satisfactory- buyer must receive permission from the court to enter into a mortgage.
Foreclosure	2 years from completion date.
Short Sale	No specific information on this yet, assume foreclosure rule of 2 years.

 

 

 

 

 

 

USDA Rural Guidelines

USDA Rural
Bankruptcy (Ch.7 & 13)	3 years from discharge date.
Foreclosure	3 years from completion date.
Short Sale	No specific information on this yet, assume foreclosure rule of 3 years.

Feel free to contact us to see how you can purchase a home.

Current Homes for Sale in North Orange County

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