“Hi Broker Bryant, I'm in the process of doing a Short Sale on my home. My husband is on the deed but is not on the loan. After we do the Short Sale can he buy us a house using only his credit for the mortgage?”
Well that’s a good question. The answer is.........I doubt it. At least not for a few years. Since he is not on the loan his credit will not necessarily be affected. However, in the new lender’s eyes, because he is on the Deed, he will be “Guilty by Association”.
This is because the property you did the Short Sale on was your “Marital Home”. He may not have been on the loan but he was an owner. He reaped the benefits of ownership and he will also suffer the consequences of the default.
The default will not show up on his credit but......the new lender will do a check on his last place of residence and his ownership of the property will show up. AND the property will show up as being sold as a short sale. “Paid in full for less than the full amount”.
Time Frame For Getting A New Mortgage
- Mortgage program lending guidelines after a short sale depend on the lender. For loans that are federally backed, such as those from the Federal Housing Administration (FHA), you'll have to wait at least two years from the short sale before you regain eligibility. That's as long as you were current on your old home loan. If you weren't, eligibility could take as long as three years. Private lenders, of course, are free to set their own time requirements. Read the full article.
Of course I am NOT a mortgage professional. This information is based on my research.
Maybe some mortgage pros will chime in with their thoughts.