Waiting Periods After Short Sales and Foreclosures

With the election taking hold of the public’s focus, many have forgotten about the real estate market. We haven’t, and we’re answering a question about it today.

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Everyone seems to be so focused on the election these days that they have forgotten about the real estate market. We haven’t, so we want to answer a common question we’ve been getting lately.

During the market crash, a lot of homeowners had to go through the unfortunate situations of a foreclosure or short sale. While these things did prevent them from buying in the immediate aftermath, most of them are able to purchase now. So, how long do you have to wait to buy after a short sale or foreclosure?

A lot of it depends on the type of financing you had. For those who had a short sale with a conventional loan, they have to wait four years to buy a home. The waiting period for those with FHA financing is three years, and you only have to wait one year after a short sale to buy if you had VA financing.

Keep an eye on your credit card debt.

As for foreclosures, those waiting periods are a little longer on average. If you had a foreclosure and conventional financing, you will have to wait seven years. With FHA financing, you only have to wait three years. With a VA loan, you would only have to wait two years.

One big piece of advice I have for those of you trying to get qualified again after a short sale or foreclosure is to keep your credit card debt low. Don’t charge more than 30% of your debt to your card. Lenders don’t view those who max out their credit cards as reliable people to lend large sums of money to.

If you have any questions for me, don’t hesitate to give me a call or send me an email. I would love to hear from you.