Is it possible to purchase a new home after a short sale?
Short sales are going to be a big part of the lending business in the upcoming months. Don't despair if you think the sellers of short sales cannot purchase for another 2-3 years, there is a situation where a borrower can purchase again following the short sale.
Here are the details:
1) A borrower CANNOT take advantage of an FHA mortgage if they are short selling to take advantage of the declining market conditions AND if the new purchase is at a reduced price, similar or superior property within reasonable commute distance. In other words there needs to be a solid reason for the short sale and the new home size, condition and commute distance will need to be brought to the attention of an underwriter to show that the borrowers are not trying to purchase more for less.
2) ELIGIBLE: If the proceeds of the short sale serve as payment in full (lien extinguished in full -- no lien / loan to be subordinated) and that the existing mortgage and any installment debts were paid as agreed for 12 months preceding the short sale. If the installment loan is due at the end of a month, then paid as agreed within 30 days be sufficient. Documentation on this point is critical, so prepare a borrower to provide the 12 months of payment and billing information for the installment debts along with the mortgage payments.
3) AND the borrowers must have the capacity to afford the new loan.
Call me to list your property or if you have any questions about the process.
Laure McElwee, Realtor (S)
'Lava Laure'
Sun and Sea Realty, Inc.
75-6547 Naniloa st.
Kailua Kona, HI. 96740
808.217.0429undefined
866.404.4789 Fax
LavaLaure@Yahoo.com
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