homeowners hoping to buy again after a foreclosure or short sale
After a foreclosure or a short sale, some people thinking their credit has been damaged might never want to bother with another home purchase. On the other hand, lenders are hearing from more and more former homeowners who can’t wait for the next opportunity to buy.
After a short sale you will have to wait two to three years to buy again. However, FHA has a loan product that requires no wait time if the homeowner had a short sale but didn’t miss any payments.
Click here for more information on the no-wait time loan (see page 4), http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-52ml.pdf
The wait time for a foreclosure is three to seven years. Conventional loans require a four-year wait time if the circumstances were job loss or illness. Otherwise it’s a seven-year wait time. FHA loans require a three-year wait period. The next surge of home buyers will be these former homeowners who will be able to qualify again.
Former home owners should use the interval to rebuild their credit, establish good spending habits that start saving towards the day they can once again become homeowners and not renters. They should be rebuilding their FICO Score by paying close attention to credit limits and making sure the credit cards and installment accounts are paid on time.