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Q: How can people who have had a short sale get back into the market?
Answer: As long as they meet the waiting periods required after a short sale they can qualify for a home loan again
Q: What are the waiting periods after a short sale?
Answer: That is dependent upon the type of loan that they apply for.
Q: What is the shortest waiting period available?
Answer: The shortest waiting period is 2 years and is available on a conventional loan with a minimum 20% down payment.
Q: What options do people have if they don’t have 20% down.
Answer: The next best option is FHA which only requires 3.50% down but it does have a 3 year waiting period instead of two.
Q: What should people do if they want to pursue one of these options?
Answer: The first thing they should do is have their credit checked and get pre-qualified by a loan officer before the waiting period is even reached.
Q: Why is that?
Answer: That way any errors that appear on the credit report can be corrected ahead of time.
Q: What kind of errors have you encountered?
Answer: I have seen the short sale being misreported as a foreclosure. This definitely needs to be corrected because on a conventional loan a foreclosure requires a 7 year waiting period as opposed to 2 years on a short sale.
Q; Can’t the borrower just provide proof of the short sale?
Answer: Unfortunately not. These days the loans are approved by an automated system that reads the data directly from the credit report. It there is an error on the credit report there is no way for us to override it. That is why it is so important to check your credit report and make sure that it is accurate.
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It's good to talk.