I had a few situations where “repeat home buyers” had to proof the sale of their former home in order to qualify for their new home. It happens more often than one would think. There are several different aspects what to look out for to prevent any hick-ups along the way, and that could throw a wrench in your new home buying plans. It doesn’t mean we can’t overcome these obstacles, it just will take longer.
One client was ready to buy a new home after a foreclosure from 7 years ago. All seemed to be going well, and we found a home she liked….. long story short, the underwriter discovered, that the bank never foreclosed on her home “properly”. (What got me is the fact that this house sat there unoccupied all this time) Her name was still on the deed. With that said, she was not able to buy her new home, and the 3 year clock started ticking all over again. Now she had to go back to the bank and make sure they processed everything correctly, and rent for another 3 years. Moral of this story is; check your paperwork, make sure the deed transferred correctly and your name has been removed of such. Good news is, you will be able to buy a home again!
Another recent event; home buyer owned several homes over the last 10-18 years, and sold all of them successfully. Now, ready to buy a new home, the lender and in this case the VA, to proof his VA eligibility, needed to see proof of the sale of his homes (they didn’t have it on record). One HUD1 found – Check, however, the other one from 16 years ago…… coming to find out, not only does the former owner of the title company exist anymore, but also the office went up in flames. Ghee, talking about some obstacles here.
Though most counties have all of these documents available online, but don’t take it for granted, as some may charge you a fee just to have access to them. Make sure that those old mortgages, which you know you paid off, have been released on the same land records where the original mortgage was also recorded. Obtain "release" or "certificate of satisfaction", otherwise you might want to ask a title attorney or title company to do a quick title search to make sure that all paid-off mortgages have been released and recorded.
We will be able to get proof of the sale, but it takes more time and money again. No matter how long ago you sold your home, try to keep a copy of the HUD1 and/or the abstract title.
Now a days, with “Cloud” storage or dropbox, it should make things much easier. So, if you haven’t done it, go ahead and scan all your important paperwork, and safe it for the future. Better safe than Sorry.
Have a great summer!
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Direct: (703) 725-6179
Office: (703) 350-4990
VA BRE LicenseNumber: 0225186540
14067 Crown Court, Woodbridge, Virginia, VA 22193