There was once a time when no one had heard of the term “short sale,” not to mention sold a home that way. At this point, with the economic downturn going on for years, and the economy remaining lethargic, it’s nearly a household term.
Time has marched on, and tens of thousands of property owners have sold their family home using a short sale. Consequently, people need to know how quickly they can buy a home following a short sale, because their lives are financially sound again and they want to take advantage of presently low prices.
There has long been an awful lot of hype and uncertainty about the ramifications of selling your house through a short sale, but the answer in short is pretty simple: You can buy a residence again in general 24 months following short selling your previous dwelling. Scenarios differ, and there is not a hard and fast rule, but it is practical legally to do it.
As a way to have the best chance of buying a home again after two years have passed from your short sale, you need to follow some very simple tips to getting your credit back in shape.
First, be certain your credit profile states the loan on your house was “Satisfied.” Actually, it was, even if they accepted less than the amount of the loan, because they accepted the offer. They could have rejected the sale and foreclosed on you.
Second, ensure that you make every payment punctually without fail. Whatever bank cards you may have, pay them religiously (and pay them off as soon as possible!).
Third, you should make sure your debt to credit limit ratio on any individual line of credit, and on all lines of credit put together, is less than 50%. This will show you are a good credit risk and usually do not get into too much debt.
Fourth, hold at least three different trade lines of credit. A trade line is a category of credit, like a car payment vs. a credit card vs. a cell phone. Mobile phone accounts are applicable trade lines, as are school loans, and any unsecured debt. You should have a balance between opening and maintaining credit accounts and keeping them payed down so you don’t end up being loaded down with debt.
And fifth, check your consumer credit rating a long time before you fill out an application for a home finance loan in order to find any irregularities and get them straightened out. You do not need to use high priced “credit repair” schemes. Simply get your financial circumstances sorted out and always maintain them this way and your consumer credit rating will demonstrate your credit worthiness.
Mr. Harper is an author and advisor specializing in topics such as Orlando real estate, Marco Island real estate, and other real estate topics. He publishes a free ezine on real estate marketing tips to help small business clients succeed.