Buying a Home After a Short Sale
Many people are unsure of whether it is possible to buy a house after a short sale. Along with this, they are clueless as to which steps to take, how long to wait, and what they can do to better their chance of success.
There is good news: purchasing a home after a short sale is possible. This may not be as simple as doing so when facing more traditional circumstances, but there is no reason why you have to give up on this dream.
What is a Short Sale?
Before we go any further, let’s take a closer look at the definition of a short sale.
This is the sale of a home in which the proceeds from the sale do not meet the balance of the debt secured by the lien against the property. With this process, the mortgage company agrees to release the lien while accepting less than the total amount of debt.
If you want to learn more about the short sale process, you can do so by visiting this page.
Rebuilding your Credit Score
Wouldn’t it be nice if you could maintain a high credit score despite a short sale? Unfortunately, this is not the way things work.
Instead, you must focus your attention on rebuilding your credit score, so you can apply for a mortgage again in the future. (Learn how to build your credit score by clicking here).
Your ability to buy a home after a short sale is going to be based largely on your credit score, as well as the steps you have taken since moving on from the property. Your new mortgage company wants to see that you are doing your part in getting your credit back in good order.
Getting a New Loan after a Short Sale
Once your credit score is back in good standing, it is time to look into the process of applying for a new loan. Here are three steps to take:
- Review your credit score and credit report to ensure that you have done everything possible to make it appealing to a lender.
- Contact multiple mortgage companies to discuss your situation and apply for a loan.
- Become comfortable with the fact that your mortgage rate will be higher than normal, due to the fact that you are seen as risk.
Obtaining a mortgage after short sale is possible, however, this is not something you are going to be able to accomplish immediately.
It will take several years of building your credit score and doing things the right way before a lender is willing to take a chance on you.