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Will we be able to secure mortgage?

We are exactly 24 months post short sale, with lates on that mortgage only. Prior to that, we purchased our current house, so we have a mortgage right now with no lates. Credit score is 770+, however we only have 10% to put down on our new house (relocating to iowa next month). Will we be able to get a mortgage? Would a credit union be able to help? **short sale on first house was due to job loss/relocation
  • February 26 2014 - Sioux City
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Answers (6)

Due to the short sale, you will have to sit through a waiting period that can last from 1-7 years depending on your finances before you can purchase another loan. If you would like an FHA loan, the waiting period is 3 years, but there is an exception. If you experienced an economic event that caused a loss of income (such as unemployment) which then resulted in your short sale, then you will only have to wait 1 year. If you plan to go conventional, the waiting period is 2 years with 20% down, 4 years with 10% down, and 7 years with 10% or less down. Lastly, you will also have to have rebuilt your credit after the short sale. Either way, the best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!
  • February 26 2014
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We aren't vets, so I know a VA won't work.  David, would your lender in DSM be able to work with us in Sioux City?  Also, if we get the other 10% (to make a 20% down payment) through a 401k loan, would that be considered as good funds for a down payment?  Our DTI is very low.  Only debt is a small student loan, and the mortgage amount we're seeking is about 1.3% of our annual income and we'd like to do a 15 or 20, if possible.
  • February 26 2014
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It will depend on the lender. You may find a bank that will do the loan in house. If you are moving to the Des Moines area, I work with a lender who can do an 80/10/10 mortgage which would allow you to avoid PMI. Don't give up if the first place turns you down. A good Realtor in the city you are moving to should know of some lenders who are a little more flexible.
  • February 26 2014
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Fannie & FHA bend, but do not break when it comes to extenuating circumstances & short sales, job loss being one of these. You should be fine as far as the length of time since the SS, but as Gary mentioned, the downpayment requirement may be an issue. This scenario would have to be ran by your loan officer through their DO Underwriting system for a precise answer. Best of Luck!
  • February 26 2014
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You will be able to get financing, but you will need 20% down to go conventional.  If you can't get the 20% you will need to go FHA/VA/USDA.
  • February 26 2014
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2 years probably need 20% down unless there is USDA eligible areas you would like to purchase in. Are either of you veterans? 
  • February 26 2014
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