There was previously a time when nobody had heard of a “short sale,” not to mention sold a home that way. Currently, with the bad economy going on for many years, and the economy remaining sluggish, it’s just about a household expression.
Times have changed, and large numbers of property owners have sold their home using a short sale. Due to this fact, many people want to know how quickly they can buy a house again following a short sale, because their lives are financially sound again and they want to take advantage of presently low prices.
There remains a lot of hype and insecurity about the ramifications of selling your house via short sale, but the answer in short is rather simple: You can get a residence again commonly two years following short selling your previous property. Scenarios differ, and there is not a definite rule, but it is possible legally to do it.
If you want 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 that your credit report says the loan on your property was “Satisfied.” Formally, it was, even if they accepted a lot less than the amount of the loan, because they agreed to do so. The bank could have said ‘no’ and repossessed the home.
Second, be sure you make all loan payments promptly without exception. Regardless of what charge cards you might have, pay them religiously (and pay them down as soon as possible!).
Third, be sure your debt to credit limit ratio on any individual line of credit, and on all lines of credit put together, is down below 50%. This demonstrates you are a good credit risk and normally do not take on too much debt.
Fourth, manage 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. Cell phone accounts are viable trade lines, as are university loans, and any unsecured debt. You should exhibit a balance between opening and maintaining credit accounts and keeping them payed down so you don’t get overloaded with debt.
And fifth, check your credit report a long time before you make an application for a home finance loan to help you find any inaccuracies and get them straightened out. You don’t have to use pricey “credit repair” schemes. Just get your financial circumstances sorted out and keep them that way and your credit score will reflect your credit worthiness.
Kevin Harper is an author and coach that specializes in topics such as Orlando real estate, Marco Island real estate, and other real estate topics. He publishes a free newsletter on real estate marketing tips to help small business clients succeed.