Buying a Short Sale Home From a Mortgage Lender
This article will cover buying a short sale home from a mortgage lender versus a traditional home listed by a homeowner. Besides buying a short sale home, will will also cover the topic of how to qualify and get pre-approved for a home loan after a short sale. Homeowners who had to go through a short sale due to financial hurdles have options in being able to get approved for a mortgage loan. The team at GCA FORUMS Mortgage Group are experts in helping borrowers qualify for a home mortgage after a short sale. Chad Bush, a dually licensed realtor and mortgage loan originator at GCA FORUMS Mortgage Group extends his thought on buying a short sale home from a lender:
The team at GCA FORUMS Mortgage Group has work diligently assisting borrowers navigate through the complexities of buying a short sale sale home as well as helping borrowers with a prior short sale get approved for a home mortgage.
The support, operations, and licensed personnel at Great Content Authority (GCA) FORUMS Mortgage Group are experts in helping borrowers qualify for a home mortgage after a short sale. Our loan officers are happy to share answers to common frequently asked questions on buying a short sale home as well as getting approved for a mortgage after a prior short sale. In this article, we will discuss and cover qualifying and buying a house after a short sale and getting approved for a mortgage with a prior short sale home.
Question and Answers on Buying a Short Sale Home
Once the property sells at auction homeowner will have approximately 45-90 days to vacate the property in Illinois. Question: I am behind on my mortgage and unable to catch up. What can I do? Homeowners can ultimately continue not to pay, and the property in Illinois will go into foreclosure. The bank will serve homeowner notice, and an auction is scheduled.
Once the property sells at auction homeowner will have approximately 45-90 days to vacate the property in Illinois. Speak With Our Loan Officer for Mortgage Loans
Not Being Able to Afford Property and Housing Payments
Question:I am not behind on my mortgage yet, but I can’t afford to keep the property. However, what I owe is more than the property is worth. Should I consider a short sale on this property? The benefit of opting for a short sale instead of foreclosure is that it doesn’t wreak as much havoc on a person’s credit and gives the homeowner more time in their home. As long as a home purchase real estate contract is on the property, the lender will not schedule an auction in most cases. Lenders would be working on negotiating the transaction with a current buyer. Dealing with the lender in a short sales transaction takes time, usually longer than 45-90 days and sometimes up to two years.
Delays in The Short Sale Process
There are several reasons for this lengthy time frame. Some home buyers get tired of waiting during the approval period buying short sale home. Many buyers think they can find a steal in buying a short sale, and when the bank comes back with a counteroffer they dislike, they walk away. Sometimes the lender has a lot of inventory in a particular area and is not adequately staffed to meet the demand for homebuyers buying short sale home. The files sit on a desk until someone gets to them. There are more reasons, but those above are the most common reasons for a delay in a short-sale transaction.
Buying a Short Sale Home After Having a Prior Housing Event
The waiting period is longer if you were to purchase a home after a foreclosure versus a short sale on conventional loans. Homebuyers can buy another property after a short sale sooner after a short sale and deed instead of foreclosure versus after foreclosure on conventional loans. Under Fannie Mae and Freddie Mac Guidelines, there is a four-year waiting period to qualify for a Conventional loan After a Short Sale and Deed in Lieu. To qualify for a Conventional loan after a foreclosure is seven years. Click Here To Buy a Short Sale Home
How To Avoid a Short Sale Deficiency
There is no deficit judgment on a short sale versus a foreclosure. On foreclosure, the lender can sue you for the loss. A prior short sale has no impact on mortgage rates. Credit scores, loan-to-value, and the type of property the borrower buys determine your mortgage rates on conventional loans. The minimum credit score to qualify for a Conventional loan is 620 FICO. You can qualify for a Conventional Home Loan After a Short Sale in four years. In contrast, the waiting period is seven years to qualify for a Conventional loan after a standard foreclosure.
How Long After a Foreclosure Can I Get a Mortgage?
A foreclosure could affect credit more than a short sale if there is a deficiency, especially if it is still outstanding. If the homeowner can’t repay, it could bankrupt the homeowner. Some people don’t see the difference between a foreclosure and a short sale, but in the long run, it can make a big difference with Conventional Loans but not government loans like FHA, USDA, and VA loans.
Buying a House After a Short Sale Using an FHA & USDA Home Loan
Homebuyers can qualify for an FHA home loan after a short sale. Here are the qualification requirements to qualify for an FHA loan after a short sale:
- The minimum credit score of 580 FICO
- Three years waiting period after the short sale date is reflected on the HUD-1 Settlement Statement.
- A prior short sale has no negative effect on your mortgage rates.
- Lenders price mortgage rates based on the borrower’s credit scores and the type of property with FHA loans.
- There is a three-year waiting period to qualify for an FHA after the recorded foreclosure date and deed in place of foreclosure.
- FHA treats short sales, foreclosures, and deeds-in-lieu of foreclosures all the same
USDA loans have the same three-year waiting period to qualify for a USDA loan after a short sale, deed in lieu, and foreclosure like FHA loans.
Using a VA Loan For Buying a House After a Short Sale
VA loans are the best mortgage loan program for any home buyer. The U.S. Department of Veteran Affairs rewards our veterans who put in the required service with the opportunity to be eligible for VA loans. The Department of Veterans Affairs realizes that many veterans can have less-than-perfect credit. The reason veterans have worse credit than civilians is due to being deployed overseas, whether it is during peacetime or wartime. Hence, VA guidelines after bankruptcy, short sale, foreclosure, and deed-in-lieu are much more lenient than other government loan programs such as FHA and USDA. Veterans can qualify for a VA home loan after a short sale if they meet the minimum mandatory waiting period.
VA Guidelines After A Short Sale
This section will cover buying a house after a short sale using a VA home loan. A veteran borrower can qualify for a VA home loan After a Short Sale in Illinois after a 2-year waiting period after the short sale date. A veteran borrower with a Certificate of Eligibility (COE) can qualify for a VA home loan after foreclosure and deed-in-lieu of foreclosure. There is a waiting period requirement of two years after the recorded foreclosure date or deed-in-lieu of foreclosure. There are no minimum credit score requirements on VA loans. Speak With Our Loan Officer for VA Loans Guidelines after A Short Sale
Does a Short Sale Affect Mortgage Rates?
Most VA Lenders like to see at least 580 FICO credit scores from Veteran Borrowers. VA Loans do not have any debt-to-income ratio requirements. As long as the borrower can get approve/eligible per AUS ( Automated Underwriting System), we can get VA loans to approve/eligible with debt-to-income ratios higher than a 60% DTI. Sufficient residual income is the key to getting an AUS approval with a high DTI. A prior short sale does not play any impact on mortgage interest rates. Only credit scores and property type determine the borrower’s mortgage rates on VA Home Loans after a short sale.
Non-QM Loans One Day After Short-Sale With No Waiting Period
Non-QM loans are specialty mortgage loan programs that are portfolio loans and have no waiting period after a short sale to qualify for a home loan. Here is how NON-QM loans work. The lender holds portfolio loans and does not sell to Fannie Mae and Freddie Mac. A minimum 20% down payment is required—no waiting period after a short sale, foreclosure, or deed-in-lieu of foreclosure with NON-QM loans.
What is the Mortgage Process of Buying a House After a Short Sale
Gustan Cho is the national managing director and branch manager of GCA FORUMS Mortgage Group and the author of buying a house after a short sale. Gustan Cho NMLS 873293 is a licensed mortgage loan originator in 48 states including Washington, DC, Puerto Rico, and the U.S. Virgin Islands (MA & NY pending). Gustan Cho NMLS 873293 extensive experience with government, conventional, and non-QM loans. Gustan Cho NMLS 873293 is an expert in alternative mortgage loan programs on owner-occupant, second homes, and investment properties. Besides helping qualify and get approved for a mortgage after a short sale, Gustan is also an expert in helping borrowers during Chapter 13 Bankruptcy repayment qualify for FHA and VA loans where the Chapter 13 Bankruptcy does not have to get discharged.
How Long After A Short Sale Can I Get a Mortgage?
The waiting period after a prior short sale to qualify for a new mortgage depends on the loan program. Every loan program has different waiting period requirements. Many ask how long I can get a home loan after a short sale. Dustin Dumestre, the branch manager of F-1 Lenders, a dba of NEXA Mortgage, LLC is an expert short sales certified loan originator. Dustin Dumestre is an expert negotiator dealing with lenders. Dustin, along with his wife Jade Dumestre are associate contributing writers for GCA FORUMS. Homebuyers who have questions about a short sale or are interested in buying a temporary sale home or listing your home via short sale and need help dealing with their lender, contact Gustan Cho at 1-262-627-1965. Text Gustan for a faster response. Or email Gustan at gcho@gustancho.com. GCA FORUMS Mortgage Group are five-star experienced mortgage brokers and correspondent lenders.
Buying a House After a Short Sale Using VA Loans?
Thyou’ller is not if you can buy a house after a short sale, but when. Every loan program has a different waiting period requirement after a prior short sale. Homebuyers with a 20% to 30% down payment can qualify for non-QM loans one day out of short-sale, foreclosure, and bankruptcy. However, few homebuyers may have a 20% to 30% down payment. Dustin Dumestre and Jade Dumestre also authorizes many viral blogs at GCA FORUMS and subsidiary websites. GCA FORUMS Mortgage Groupdoes not have any overlays on government and conventional loans. We go off AUS Findings. Veterans with a Certificate of Eligibility and have questions on qualifying for VA loans, don’t hesitate to contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. The team at GCA FORUMS Mortgage Group is available seven days a week, evenings, weekends, and holidays via phone, text, or email at gcho@gustancho.com.
Frequently Asked Questions on Buying a Short Sale Home
Every homebuyer should consider several important considerations when purchasing from a lender’s short-sale home. Let us look at these issues and how to properly go over short-sale homes for buy or sell purposes. Buying a short-sale home is as advantageous to the buyer as there are challenges that make many home buyers consider critical features. In some situations, the buyer’s financing over two months is dispensed with, or there are major difficulties in obtaining it.
Is There a Bargain Price Buying a Short Sale Home That You Cannot Resist
The thought that short-sale homes are a bargain is not true. Short-sale homes can be easily overvalued and, hence, overpriced. Homebuyers and their real estate agents must thoroughly research the market prices of similar homes in the same area. Because many short sales are generally non-marketable, only a few buyers will be interested, as very few are offered for sale. If you are buying a short-sale home that is a rental, most will have old tenants staying in them. However, short-sale homes do not look as bad as foreclosure houses. Nonetheless, there are other ones that are few and good that will make the purchase of this kind of property worthwhile:
Buying a Short-Sale Home is a Lengthy Process
Short of completion, short sale timelines on such transactions can take months. It can take up to one year to close. The average time to close on a short sale home is six months to one year. It is usually shorter for certain deals, taking approximately 3 to 6 months, but longer in other instances where a second lien is introduced. As per most cases, it can occur short in, but that is more of an exception than the rule. It is, however, a sad fact that many short sales take about three to six months to be closed in the USA. However, the time frame is subject to change based on several common things, with lenders taking the short sale process on a home purchase as not their main priority.
Facing Issues with Property Selling When Buying a Short Sale Home
Keep an extra alert on long-listed short-sale homes on the MLS. These homes may not sell because the owners did not maintain them and lacked the necessary funds. They may also have faulty plumbing, electrical, and HVAC and need replacement. Even if the seller’s acceptance is within the price, it is mostly inconsequential because the lender will not return such an offer anyway. The other thing complicating the procedure is that there are two parties and processes: one cares for the seller and one for the lender. Once the homeowner accepts the offer, the lender must review the real estate purchase contract and sign off on the final approval. This is the last resort because all other processes have gone well, and the house seller is unwilling to sell or look for alternative ways to reduce the price.
Price Concessions Buying a Short Sale Home
It is possible to regard a compromise as having failed on either of the two extreme ends of the spectrum. Since a particular sale usually goes cheap, some properties have remained available, touching or coming close to the current market rates. The core concern of the lenders will be the recoverable or recoverable amount that can be made in the business. This explains why they do not become horrendously active in chasing giveaways. The extent of markdown has a rather wide scope and is known to vary depending on the geographic location, lending institution policies, and the goals of the particular deal.
Things to Watch Out for When Buying a Short-Sale House
Homebuyers should be wary of buying a short-sale home, as it is too long from the maximum time frame given to them to other periods they would want the sales closed. This time constraint primarily focuses on closing the homeowners’ lender and the degree of priority subject to short sale business. This assists in alleviating the overabundance of services that are instead unhelpful towards the short sale process. Lauren Wright of The Wright Realtor, a top producing real estate agent in Chicago says the following about buying a short sale home:
The lender can contribute even when the selling parties have accepted the offer. This propounds additional barriers in each deal that may haunt the proceedings.
The property must be in good condition in case there is a short sale, and this case will last for several months. The liquidity of certain contracts is mostly restricted because the real estate market is always in transition. Where there are many mortgages, doors-chainset vessels are mortal down to court convey, and lawyers hunt to the adjournment to sell the house for more execution.
Title Issues Buying a Short Sale Home
It can also be noted that title issues can be other issues that may affect the property’s title as the case goes, owing to the funds usually moving from one account to another within the course of the case. As already stated, short sales can help cut costs, yet there are also many problems and risks involved. Any prospective buyer in a short sale should be prepared for a prolonged and complex undertaking. It is wise to seek the assistance of estate agents who are familiar with the short sale process. This is how the situation can be solved.
Responses