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Saturday, March 30, 2013

Mortgage After Foreclosure, Bankruptcy and Short Sales

by Jason

Mortgages and home ownership are significant issues for my debt clients that are facing foreclosure, bankruptcy or considering a short sale for their home. When one of these events happen, there are general rules of thumb of what will happen if you seek a mortgage and when you might be able to qualify for a mortgage.

Foreclosureresults in the longest waiting period before you can qualify for a mortgage. For this reason, when things appear dire, a short sale or bankruptcy should be a strong consideration before you allow your house to simply go to foreclosure. On average, it will be 7 years before you can qualify for a Fannie Mae or Freddie Mac mortgage after completion of the foreclosure. FHA and USDA Rural will require at least 3 years from the date of completion of the foreclosure and VA will require 2 years. No matter how you look at it, this is a long time and by avoiding a foreclosure with a bankruptcy, as you will see, you can cut this time in half.

With a Short Sale, the time before you can qualify for a mortgage sale is 2-4 years depending on the loan to value ratio of the short sale agreement and depending on the conditions of the sale. The mortgage company will still look at the sale date (the day the short sale closes) when considering your qualification for a mortgage and the time period you have to wait. This range is the same for Fannie Mae, FHA and USDA Rural and Freddie Mac is a straight 4 year time period.

Bankruptcyon the other hand, carries with hit the same 2-4 year time period of a short sale which is significantly less than what happens with a foreclosure. Fannie Mae and Freddie Mac require waiting 4 years from the date of discharge, FHA and VA is 2 years from the discharge date and USDA Rural is 3 years from the discharge date.

Incidentally, with a Chapter 13 Bankruptcy, the time period may be reduced to one year with satisfactory plan payments and special permission from the Bankruptcy Court when considering a FHA, VA or USDA Rural mortgage.

When is becomes apparent that things are beginning to go downhill financially and that a foreclosure may be imminent, it is best to consider going ahead with a bankruptcy or short sale to shorten the time period you have to wait if home ownership is a renewed goal after you obtain financial freedom. Allowing a foreclosure will all but guarantee that a mortgage and home ownership is years away and avoiding the foreclosure will go a long way in allowing you to return to home ownership sooner.

My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.

The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.

It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.

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