If you negotiated a short sale of your home, you may be surprised to learn that some mortgage loan underwriting systems can’t distinguish short sales from foreclosures on consumer reports. And that may keep or delay you from getting a new mortgage.
You see, borrowers who go through a foreclosure typically have to wait seven years before they’re eligible for a new mortgage. But short sellers may qualify in as little as two years. When you’re trying to buy a new home, an additional five years can seem like a lifetime. So is there anything you can do to improve your financial footing? You bet there is.
- Get a letter from your lender confirming that your loan closed in a short sale, not a foreclosure. Send a copy of the letter to each of the nationwide credit reporting companies: Equifax, Experian, and TransUnion.
- Order a copy of your credit report. Make sure the information is accurate. If you find a mistake, contact the credit reporting company and business providing the information to correct the error.
- When you’re ready to buy another home, get pre-approved for a loan. A pre-approval letter from a lender shows that you are able to go through with a purchase. Pre-approval is not a final loan commitment; it means you met with a loan officer, your credit report was reviewed, and the lender believes you can qualify for a specific loan amount. This pre-approval process allows your lender to identify issues and errors in your credit report that may keep you from qualifying for a loan. That, in turn, allows you to correct inaccuracies before they can prevent you from buying another home.
- Don’t Let a Short Sale Keep You From a New Mortgage | Consumer Information (louisvillemortgageguide.com)
- How Can I Get a Mortgage After Credit Problems? (kentuckyusdaloan.com)
- FHA cuts mortgage wait times after hard times (louisvillemortgageguide.com)
- Pre-Approved Credit Card Offers: 4 Things You Really Need to Know (dailyfinance.com)
- Fannie Mae finds fix for short-sale glitch (TBO.com)
- Mortgage Misconceptions (bertwilliamshomes.wordpress.com)
- Home buyers may qualify for FHA loan despite short-sale or foreclosure (realty008.wordpress.com)
- How Much House Can You Really Afford? (therealestateconsultantsupland.wordpress.com)
- Pre-Qual or Pre-Approve What’s the diff ? (westchesterctyhomes.com)
- My Credit Is a Mystery. Where do I Start? (nenebeauty.wordpress.com)