Profile picture for lintas1

Options for Mortgage with after short sale 3.5 yrs ago

Hello, I am in market for buying but we were forced to do a short sale 3.5 yrs ago. Now, I understand that Fannie Guidelines require 4 yrs wait period. Are there any options besides FHA? I wouldnt like to do FHA due to lifetime MI.
We are looking to put down 10-12% initially and looking for in 450K price range (which is quite low considering expensive prices in Northern VA)

Please advise, and Thanks in Advance
  • December 12 2013 - Fairfax
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Answers (6)

Profile picture for lintas1
Everyone,

First of all thanks for your responses. I understand the FHA part including 11 yr refy or 1 yr refy based on price appreciation/additional equity infusion.

I am nervous about rate increase in next few months. I have already gotten a refy this year using portfolio lending for my investment condo, but that was in Colorado. I am wondering if there are similar options in Virginia
  • December 12 2013
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Well if you want a mortgage right now, FHA would be your best option since you are already past the 3 year mark. Like the others have said, you can refinance later on into a conventional in order to avoid the mortgage insurance. You still have the conventional option open, it just depends on your down payment and if you are willing to wait. If you have 20% down then you can get a conventional after two years. So that would be available to you now. If you have 10% down then you can get a conventional after four years. So that means you will have to wait another 6 months for that option. If that is the route you want to take I recommend to you spend the next 6 months building your credit, increasing your savings, and avoid large purchases. Either way, the best thing for you to do is to speak with a lender directly to see if you can get started on financing with your situation. There are lenders like myself that would be glad to speak with you to help you get the loan that you need. Well I hope this helps! If you have any further questions or if you would like a loan, feel free to contact me.

Good Luck!
  • December 12 2013
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Profile picture for GMerino

The program that you would best fit would be the FHA home loan, I know it really is crappy to do the MI thing but once you are able to qualify for a conventional loan do it.  You may wait and let prices along with interest rates to go up or get in a house and enjoy while you wait to get out of the FHA home loan. 

  • December 12 2013
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you could always refi out of the FHA loan into a conventional loan later on. The mortgage insurance would be cheaper on the conventional loan and if you pay down the balance or the home appreciates, you may be able to obtain a conventional loan with no MI at all.
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Profile picture for lintas1
Thanks Shawn.

Unfortunately, we dont have 100K to spend on downpayment with Fannie or Freddie. Hence, we are exploring if there are any other options.

Portfolio lending?
  • December 12 2013
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Freddie Mac is the other option. If you put 20% down you it can be 2 years from the date of the sale.
  • December 12 2013
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