DEROGATORY CREDIT WAIT PERIODS
One of the most common questions that I get today from potential buyers is, "I had to short sale my house a couple years ago so when can I buy again?" or "I had to let my house go into foreclosure a few years ago, when do you think I can buy again?"
The simple answer is "it depends". It depends on several things, was it a short sale of foreclosure?, were you in default? and what type of loan will you be getting on your next purchase. Below are some guidelines to use but I recommend that you contact your local lender to see if guidelines have changed.
SHORT SALES: Time starts at date of recorded sale
FHA: No waiting period with no mortgage default OR 3 year period if in default at time of closing.
VA: No waiting period with no mortgage default OR 2 year if in default at time of closing.
CONV: 2 year wait with 20% down payment. 4 year wait with 10-15% down payment. 7 year wait with less than 10% down payment.
FORECLOSURES: Time starts at date of recorded sale
FHA: 3 year wait period, reduced if borrower can show extenuating circumstances AND re-establishes good credit.
VA: 2 year wait period , reduced if borrower can show extenuating circumstances AND re-establish good credit.
CONV: 7 year wait period or 3 years for extenuating circumstances.
BANKRUPTCY: Time starts at date of discharge
FHA/VA: Chapter 7 or 11 - 2 year wait period AND re-establish credit. Chapter 13 - No wait period with 12 month good pay history.
CONV: Chapter 7 or 11 - 4 year wait period or 2 years with extenuating circumstances. Chapter 13 - 2 year wait period or 1 year with extenuating circumstances.
**Extenuating Circumstances Include: Health issues, Death of a wage earner**
Short Sale & Foreclosure Information
Brook Baker with Provident Bank Mortgage helped provide information.
If you are unsure about short selling your home or if you want to jump back into homeownership, contact me, it is a complicated process that takes the expertise of experienced professionals. I hold the CDPE® Designation and am ready to identify all possible options and, when possible, assist in the quick execution of a short sale transaction.
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