How Do I Get A Loan After Short Sale?
How do I get a Loan After Short Sale?
Help...My husband and I had to go through a short sale a few years back and now we are in the market again (he lost his job...) but the only we can buy is if my mother co-signs...but she says we have to live near her for her to do that!! Help pleazze!
--Jolene, (posted) From the internet
Dont worry Jolene. It sounds like you and your husband are a perfect case for re-applying for a loan because you have bad credit due to financial hardship.
You can still get a loan after short sale...just because you hit a rough patch in your life a few years back does not mean you can never own a home again. You can get a loan after short sale.
Its not as easy as someone with perfect credit, but its not hard with the right help.
BASIC FACTS ABOUT A LOAN AFTER SHORT SALE
The timeline to start working towards a new loan is two years after your short sale. Though the waiting period is technically three years, its good to get a head start on the process.
FHA-insured loans are the least expensive way to get a loan after short sale; with down payments as little as 3.5 percent.
Beware of loan sharks, those that guarantee a loan six months after your short sale. These folks are technically called hard-money lenders and they make money off of exploitation. They usually require twenty to thirty percent as a down payment and think they can force you into terrible terms. Also, these tend to be adjustable (read: means they can raise the rate on you).
WHAT ABOUT SUBPRIME? Subprime lending, probably the single biggest contributor to the recession and housing collapse, no longer makes complete financing arrangements. In fact, its illegal for them to do so.
WHAT SHOULD I DO TO GET A GOOD LOAN AFTER SHORT SALE?
+ Improve your credit anyway you can. Take out a credit card (even a secured credit card if you have to) and pay it off every month.
+ Dont go job hunting or switch careers if you can avoid it. If you have stable income, stick to it. Nothing looks worse than someone job hunting in the middle of a loan application.
+ Save, save, save. Do what you have to do to save money. Stop eating out. Make your coffee at home (thats right, starbucks DOES add up), refinance your car, carpool, quit smoking, quit drinking, do whatever needs to be done to get at least ten percent of your down payment saved up.
+ Do not fall behind on your bills. If you have not done it yet, set your bill payments online. That way you will never forget to pay.
FICO SCORES and THE LOAN AFTER SHORT SALE
FICO stands for Fair Isaac Corporation, and it is a way to determine how creditworthy you are. Though there are other ways to determine your credit score, none of them are as popular as the FICO score. Note, your FICO score and your credit rating...are not the same thing! They are usually similar, but the FICO score is the most widely adopted and statistically sound of all the scoring systems.
So lets assume you need a loan after short sale. If your FICO score is between 600 and 640...well you can get away with paying as much...if not less, than you did the first time around. Even if you went through bankruptcy, you can still pay as little as 1.5 percent more than someone who has not. This assumes you meet some requirements and can pay ten percent up front.
If your FICO score is between 560 and 580 you are probably looking at paying at least 2.8 percent more than someone who never had a short sale or had bad credit...tough luck. Check out more resources at.
http://www.homeloanacademy.com/index.php?option=com_content&Itemid=67&catid=35&id=48-buy-a-house-after-foreclosure-soon&view=article
If you are considering a loan after short sale, go to http://www.homeloanacademy.com/register
for a free consultation.
Otherwise, good luck, Jolene!
by: Home Loan Academy
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