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Does doing a short sale affect you when you want to buy a house?

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October 18 2012 - Salt Lake City
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Profile picture for wetdawgs
Selling the house and bringing the difference to closing is also a possibility and would not have a negative impact on your credit. 

A short sale would certainly hurt your credit, but as mentioned before, one has to have documented a financial hardship to qualify for a short sale.   Here's a good link for description of qualifying for a short sale.


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October 21 2012
Profile picture for fb825778516
Thank you for your answers. I think all of these responses are very helpful. Here is the situation, back in 2008 I signed on the house with my dad because he wouldn't qualify by himself. The idea was to get my name of the mortgage and free my credit after 2 years. Well, he doesn't qualify for a full refinance because he did a loan modification last year and we owe more than the house is worth. I want off the loan all together but because it is an fha loan I'm not able to get another mortgage. So,I'm pretty much stuck on the mortgage not being able to purchase my own house. So at this point I think selling the house will be the best option,but I have good credit and if a short sale will hurt my credit then that's not an option either. I'm really out of ideas how to get my name off this loan.
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October 21 2012
Profile picture for wetdawgs
One factor none of the agents (except Ofe) have mentioned in that in order to qualify for a short sale, you have to document a hardship that has affected your ability to pay the mortgage and what you owe.    Just because you owe more than what you can sell for doesn't mean you are qualified for a short sale, some sellers have to bring money to closing.

Therefore, if you short sell your current house due to a hardship, it would be hard to understand how you'd be financially ready to turn around and buy another home immediately.

Perhaps it would be helpful to add more details.



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October 19 2012
If you are selling your home in a short sale then and only then, if you complete the short sale succesfully and re-astablish your credit in about 2 years time you could be ready.  That is by the lenders standards to get back into the housing market.
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October 19 2012
Hello Stuart, Are you short selling a property and looking for another, or are you looking to purchase a short sale? Short sales can be excellent values, however they are time consuming.
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October 19 2012
In order to answer your question we will need more information.  Have you ever been late with a payment, have you asked for a loan modification...?  If the answer to these two questions is affirmative, then you may need to wait approvximately 2-3 years to purchase again.  Short sale or loan modifications are only done when there is hardship that the bank considers substantial, therefore once either is put in place you need to wait 2-3 years. 
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October 19 2012
Stuart, Thank you for the question.  You may have several options here.  First and foremost you should consult your attorney, financial adviser, cpa and finally the bank that your mortgage is through.

Once that is done you can ask for a loan modification if you qualify, you can do a short sale-there is information on a Cooperative short sale & HAFA.  Feel free to look these up on-line.

Only you know if you are in arrears in mortgage payments.  If so, again talk to your bank that holds the mortgage.  THey are very willing to work through the payments and may attempt to assist you in modifying the loan.  If you are behind in payments you may/may not qualify for a short sale based on hard ship.  The long-story short on a short-sale is the bank agrees with you to list the property for sale and the bank may take an offer for less than the amount you currently owe on the loan.  In turn you agree to give up the property to a new buyer or do a deed in lieu and transfer possession of the property to the bank.  They may or may not give you compensation for moving expenses once the home sells or a deed in lieu. 

Please take the time to educate yourself and talk to the professionals to find out what is in your best interest.  Do NOT assume.  Ask lots of questions and research. 

Oh did I tell you to consult your attorney, cpa, financial adviser and your bank before making decisions that may affect your financial future.  Best of luck to you.
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October 18 2012
Mostly yes, and sometimes No...it just depends on your scenario.   Have you ever been late with your payments?  If not, you may be eligible to do a short sale and purchase a new property immediately without having to wait the typical 2-3 years...assuming your credit is good, finances are in order, employment, etc.  I suggest you speak to a lender before you speak to a Realtor about doing your short sale.
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October 18 2012
 
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