Can you buy a home after a short sale or foreclosure? Absolutely. The bigger question is when. And that is a much harder question to answer. There are many variables that go into deciding when someone should buy a home after a short sale or foreclosure, and the real estate experts at the Equifax Finance blog discuss those variables in the recent article, “Can I Buy a Home After a Short Sale or Foreclosure?”
1. Duration of delinquency – Foreclosures and short sales take time, and the longer they take (the longer you go without paying), the worse it is on your credit rating.
2. Deficiency judgments – The amount of unpaid negative debt that you are left with after a short sale or foreclosure affects your ability to get financing.
3. Interest rates – The lower your credit score, the higher your interest rates; and that can mean thousands of dollars over the life of your loan. Saving until your credit score is high enough for you to get a good credit score will mean major savings over time.
4. Down payment – You’ll need a good down payment; some rules now require a 20 percent down payment, so you need to have that cash up front.
5. Waiting period – Some mortgage companies and mortgage insurers require a waiting period of two to seven years, depending on the situation.
Great information provided by Atlanta Real Estate Forum