Based on the struggling economy of the past 3 years many homeowners have been forced get rid of their property through a short sale. As people rebuild their credit and improve their incomes they are starting to get the itch to buy a home again. Here are the general guidelines for qualifying for a conventional mortgage following a short sale.
Be Patient
The first thing to understand is that time heals all wounds, even credit problems. Most lenders will require the people wait a minimum of two years up to a maximum of four years following the short sale of their home. Lenders require this passage of time to give people a chance to re-establish their credit and also improve their financial habits that will lead to better budgeting and better saving principles.
Get a Good Down Payment
For people that can save up a 20% down payment they will only have to wait the minimum two years. In addition, if these people faced extraordinary circumstances that forced them into the short sale, they may also be given a little leniency and only have to wait the two years.
For people who were simply victims of bad planning and wrong decisions, they will have to wait the longer period. Also, people that only have a 10% down payment will have to wait for the four years.
Take the Time to Reestablish
During the waiting period it is a good idea to really invest in your financial knowledge. Read up on how credit works and develop good spending habits. This is the time where the old adage “pay yourself first” will really come in handy. Putting away a little in savings each time you get paid will go a long ways towards building up your down payment as well as developing an emergency fund that can help you out when an emergency arises.
Contact us below or apply online to see if you qualify for a conventional mortgage!
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