How to Buy a Home in Irvine After a Short Sale

Robin Fenchel December 12, 2012

 

Many individuals and families have faced bumps in the road when it has come to holding onto their homes in Irvine, California and elsewhere.  Some have lost jobs and have not been able to find employment for months–even years. Some have experienced illnesses that have depleted their savings.

The economic hardships that many families faced over the past several years resulted in many folks losing their homes due to foreclosure or short sale, as well as having to go through bankruptcy.

A short sale occurs when a home owner sells their home for less than what is owed to the bank.  Becoming a home owner after a short sale is not as difficult as you may think.

A short sale has many benefits over foreclosure, one of the most important being the shortened time line before being able to re-enter the home buying market under certain circumstances.

Buy One Day Out of Short Sale

FHA will allow a home buyer to purchase a home 1 day out of short sale if the sale IF:

  • The borrower was current on the mortgage at the time of the short sale
  • The Short Sale occurred as the result of extenuating circumstances

Here are the guidelines for buying a home after Short Sale using the 3 most common loan types:

Conventional Mortgage

  • You can buy a home 2 years after a Short Sale with a minimum 680 credit score and 20% down payment
  • You can buy a home 3 years after a Short Sale with a minimum 680 credit score and 10% down payment
  • You can buy a home 7 years after a Short Sale with a minimum 640 credit score with less than 10% down payment

FHA Insured Mortgage

  • You can buy a home 3 years after a Short Sale with a 640 credit score and 3.5% down payment

VA Guaranteed Mortgage

  • You can buy a home 2 years after a Short Sale with a 620 credit score and no down payment
  • Due to the unique circumstances surrounding deployment and/or relocation of active duty military personell, extenuating circumstances may have resulted in the short sale of the home.  Check with your VA lender if you feel that your short sale occurred due to circumstances completely outside your control.

How to Buy a Home After a Short Sale was originally posted on Find My Way Home.

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