Can I Still Buy a Home in Fort Worth, Texas after a Short Sale?
Your dream of buying a home in Fort Worth, Texas doesn’t have to end when you sell your house through a short sale or lost it to foreclosure. Many distressed homeowners think it is impossible to qualify for a mortgage after a short sale.
There’s a light at the end of the tunnel for distressed homeowners since they can still qualify for a home loan after the short sale if they want to buy a home in Fort Worth, TX.
However, your second chance at homeownership won’t happen that fast. There are still waiting times and qualifications you need to comply with in order to obtain a new home loan.
Normally, short sellers had to wait at least 2 years after closing the short sale before they can qualify for a new home loan, but the time frame can be sooner or later, depending on the type of loan and the amount of downpayment.
Here are the different timeframes depending on the type of loan:
*Shorter Waiting Period for FHA loans
You may not have to wait 3 years to apply for a FHA mortgage loan after the short sale. You can buy a home in Fort Worth, Texas as soon as one year after a short sale with an FHA loan and a 3.5% downpayment if:
- You did not have any late payments on your previous mortgage at the time of the short sale.
- You were on time for all your mortgage and other debt payments for at least 12 months leading up to the short sale.
- you can prove your hardship that led to the short sale.
- The proceeds from the short sale served as full payment for the loan.
- You have a clear report with the Credit Alert Verification Reporting System (CAIVRS).
- You have an M1 mortgage credit rating for your previous mortgage.
2-Year Waiting Period for Conventional Loans with 20% Down Payment
You can buy a home in Fort Worth, Texas just 2 years after a short sale using a conventional loan with a 20% down payment. During the 2-year wait, you should work on improving your credit score and saving for the 20% down payment. A 20% down payment helps you avoid expensive mortgage insurance on loans with less than 20% down payment.
2-Year Waiting Period for Conventional Loans with 10% Down Payment AND Extenuating Circumstance
You can buy a home 2 years after a short sale with 10% down payment if you can prove with documentation acceptable extenuating circumstances that led to the short sale. Examples of acceptable extenuating circumstances include one-time events that are beyond your control that caused a big reduction in income or a significant increase in your expenses.
Fannie Mae Update on Mortgage After a Short Sale
As of August 16, 2014, Fannie Mae’s policies have been changed. For short sellers who want to get conventional loans, the waiting period will change from 2 yearsu to 4 years. This change applies to loans taken on or after August 16, 2014.
If you are ready to buy a home in Fort Worth, Texas after going through a short sale, foreclosure, or deed-in-lieu, contact the best real estate agent in Fort Worth Texas who could help you decide which loan would be best for you and in selecting your dream Fort Worth Texas home for sale.
For more Information, call me, Donnie Keller, 24/7 at 817-932-4900.