I Sold Short… When can I buy a new Fort?

I Sold Short… When can I buy a new Fort?

            Short Sales have become standard fare in recent years.  A term that many could not define just 5 short years ago has quickly become the topic of table discussion throughout the country.  What was once an embarrassing scenario has, over time, become the norm.  There is no longer a loss of pride in selling short; it’s simply a strategy to better yourself and your financial position in the world we live in.  So if the Short Sale has become as common as a Kardashian eyeing you in the checkout line, does that mean it’s getting easier for a short seller to become a bountiful buyer?  The simple answer… YES.

Wait two years, and there may be cheers!

            Lynn Whitefall of Supreme Lending states that while many may be surprised, there are in fact loan programs out there today that that allow a short seller to purchase a new home in as little as two years from short sale closing date.   Banks need loans to profit and as many buyers in recent years fell into the same under water situation, they need to write loans once again to stay in the black.  Regulations have been modified to “repair” the bursting of the bubble we experienced.  Banks are allowing previous short sellers to purchase just 2 years after their short sale if taking a conventional loan with 20% down, or after 3 years if acquiring an FHA loan.  What was once a means to an end has become a feasible way to push the reset button.  If you sold short in the past or have to sell short in today’s market, don’t fool yourself – you CAN be a homeowner again!

Maintain your credit - don’t forget it!

            Home owners in under water situations can and have taken their frustration to exorbitant levels.  Some owners, so upset with their short sale situation, will knowingly destroy their personal credit as well; they’ll stop making payments to other creditors or simply rack up credit card bills without a plan to pay.   It is imperative that these factors don’t take place if you have goals of homeownership in the near future.  While banks are accepting loan applications from previous short sellers, credit worthiness is always going to be the main factor in their decision.  If your home is underwater, that’s one thing, but be sure to continue payments with your other creditors to maintain a strong score after the short sale clears.  Some brokers will refer to this as a strategic short sale, selling short with plans of purchasing again.  Keeping your credit score in check can and will allow you to buy once again, in as little as 24 months!

History repeats, but you don’t have to

            The time has come; you are in the market to buy a home once again!  Slow down Old Sport, I know you’re excited but let’s plan accordingly.  We all know how it feels to get past a life-effecting barrier; the excitement can be contagious.  Now more then ever, however, you need to be fully prudent, honest and responsible regarding your next home purchase.  Excitement can often lead to bad decision-making, over spending, and a lack of due diligence.  We don’t want to be in the same situation once again, so be sure to move forward with caution and care.  Work with a mortgage and Real Estate broker who will fully explain the terms of your loan as well as true fair market value of the home of interest.   By completing these tasks before you go to contract, you will be less likely to become a short seller again.   

            If in the market after a short sale situation or in need of selling short today, please contact Rick Rapp at 954-873-1801 for your Real Estate needs.