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Can I buy a House after a Foreclosure or Short Sale?  How Long Do I have to Wait?

Foreclosure, short sale, bankruptcy, repossession... After any of these major events it often surprises people when we tell them that they are pre-approved to get a loan to buy a home again.  Of course you won't be able to get a loan right away but it you might be surprised to know how quick you can get a mortgage again.  Since the waiting period varies on the different loan types we'll give you some basic information for the major loan options.  Please consult your mortgage representative for more information.

Conventional Mortgages

Conventional mortgage (not for jumbo loans) typically requires at least 3% down payment.  Here are the waiting periods for Bankruptcy, Foreclosure, and Deed-in-Lieu.

Bankruptcy Chapter 7 or 11 waiting period is 4 years or 2 years if there was extenuating circumstances such Death (not yours), Illness, Job Transfer, or Accident Resulting in Serious Injury.  Extenuating circumstances are things out of your control that dramatically affected your ability to pay your mortgage.  

Bankruptcy Chapter 13 waiting period is 4 years from discharge date or 2 years if there was extenuating circumstances.

Multiple Bankruptcy Filings will require 5 years or more if the bankruptcies were in the past 7 years.

Foreclosure waiting period is 7 years or as little as 3 years if there were extenuating circumstances.

Short Sale or Deed-in-Lieu of Foreclosure was a smart move if you did that instead of foreclosure because the waiting period for that is only 4 years or 2 years if there were extenuating circumstances.

USDA Mortgages

USDA is a great option for getting a 100% loan.  Here are the waiting periods.

Bankruptcy Chapter 7 waiting period is 3 years.

Foreclosure waiting period is 3 years.

Short Sale waiting period is 3 years.

VA Mortgages

Here are the waiting periods for getting a VA loan.

Foreclosure / Deed-in Lieu / Short Sale waiting period is 2 years from date of completion.  1 year is possible if there were extenuating circumstances.

Bankruptcy Chapter 7 or 11 waiting period is 2 years from date of discharge.  1 year is possible if there were extenuating circumstances.

Are there other options?

Yes of course there are other options.  You could pay cash for the property if you have the money.  Also there are some portfolio lenders that might do the loan at a higher interest rate or with more money down.

How do I find out if I qualify for a loan?

It's possible that you might be declined by a lender and then find out from another lender that there was an option for you.  It's important to talk to an experienced lender when discussing your options.  If you don't have one, we can help.  Pat Holsten with American Security Mortgage helped us with the information for this and I'm sure she'd love to help you too.

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Regina Drury