If you are serious about obtaining the American dream of owning your own home and willing to take a little time. your chances of being approved for a home loan after experiencing a short sale will increase tremendously.

The following steps will help guide you and bring some understanding to this, at times, order to improve your chances of approval here are some preliminary steps you can do to reach goal of owning your own home.

Traditional guidelines require that two to three years must pass after as short sale.  For a conventional loan it is three years with no exceptions.  With an FHA loan, though it is more expensive, allows more flexibility with its guidelines in regards to short sale and credit grading.  The first is guidelines state two years should pass in order to qualify.  There is an exception to this time-frame if we can prove extenuating circumstances (a onetime event).

After we have proved your onetime event was not financial mismanagement and not to be duplicated, you will need to provide a history of established good credit since the time of your short sale.  If traditional credit such as credit cart installment loans are not available or not reflecting on the credit report we can use nontraditional credit items to satisfy this conditions.  These nontraditional items can include nontraditional credit references like cell phone bills, high rent payments, monthly contributions to a 401 k, cable or monthly subscriptions which are not documented.

Another hurdle we must contend with are any late payments prior to you short sale.  The only way to get through this condition, without having to wait the allotted time frame, is to prove under no circumstances were you able to pay until the sale was final. Please review this information with your selected loan officer.

How much can you afford is another important factor.  This is also known as your ability to repay.  Being that your ability to repay has been compromised in the past you must be able to present a strong case showing you ability to repay now.  What this means to you the buyer is that solid work history is needed to satisfy continuance of pay. Also, in order to maximize your buying power you need take a good look at your liabilities before any application as no exceptions to your debt to income ratios will be made.

Want to know what homes are currently for sale on the Central Coast of California?  You can see up-to-date listings of properties for sale here.


For more information about current interest rates and mortgage loan options, call Sarah Bradley from Wells Fargo Mortgage in Pismo, Beach, CA