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How to Purchase a Home after a Short Sale


There are a lot of misconceptions surrounding what happens after a short sale-whether you can purchase a home again and what occurs to your credit score. If you’ve gone through a short sale, but are concerned about your ability to buy another home in the future-you may be surprised to learn these simple facts.

A Short Sale is Not a Foreclosure

First of all, having gone through a short sale does not immediately disqualify you from owning another home in the future. The fact that you chose the short sale route, as opposed to simple walking away and allowing the bank to foreclose, speaks volumes about your credibility and character. A short sale, not only, limits your liability, but helps the bank or lender-tremendously.

Credit Reporting

How the bank reports your credit to the three major credit agencies-and whether you have multiple “lates” has more to do with your ability to obtain future financing than simply having a short sale on your record. For instance, if you let the bank know you were having trouble paying your mortgage, were not more than thirty days late, and completed a short sale before too many delinquencies, you’re credit may be in relatively stable shape.

The Effect of Delinquencies

If, however, you were thirty, sixty or even ninety days delinquent on your mortgage-this could seriously impact your credit score. But even if this is the case, it doesn’t mean you can never own a home again. A short sale always looks better on your credit than a foreclosure. And in time, even with multiple delinquencies on your record, you’ll be able to reestablish your credit rating and purchase another home in the future.

Credit Score Improvement

Times can vary concerning how quickly your credit rating improves. And establishing a history of paying all you bills on time will help exponentially. If you’re unsure as to your credit rating or what delinquencies are shown on your credit report-you may want to meet with a professional. By speaking with an experienced mortgage broker of loan officer you can determine your current FICO score, how to improve it, and what steps to take for purchasing your next property.

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