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waterspout4
My loves
Member since 5/06 19150 total posts
Name:
Kelly
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Short sale- please give me the good, the bad and the ugly
Our house has decreased about 40-50% since buying it in 2007. We want out to get a bigger place. We bought this starter home to build up equity, paid the mortgage every month, and are still getting it in the a$$. I'm tired of playing by the rules and being good and waiting. SICK OF IT!
So please talk to me about a short sale. Why shouldn't my pregnant hormonal butt want to do this?
BTW: Renting is out of the question as we'd lose about $400 per month, IF we have tenants.
Message edited 2/28/2012 4:01:41 PM.
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Posted 2/28/12 4:00 PM  |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Short sale- please give me the good, the bad and the ugly
if you short sale you house- you generally can't buy again for 2 to 3 years
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| Posted 2/28/12 4:10 PM |
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waterspout4
My loves
Member since 5/06 19150 total posts
Name:
Kelly
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Re: Short sale- please give me the good, the bad and the ugly
Posted by Beth
if you short sale you house- you generally can't buy again for 2 to 3 years
That's what I thought! The realtor told us we could buy immediately. I got so confused. I was thinking 'So why is this a bad thing?' 
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| Posted 2/28/12 4:26 PM |
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Serendipity
Summer!
Member since 4/07 7631 total posts
Name:
PrayingWishingHopingALOT
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Re: Short sale- please give me the good, the bad and the ugly
Posted by waterspout4
Posted by Beth
if you short sale you house- you generally can't buy again for 2 to 3 years
That's what I thought! The realtor told us we could buy immediately. I got so confused. I was thinking 'So why is this a bad thing?'
Nope cannot rebuy right away. and it also destroys your credit (I believe). Someone on here might be able to confirm this part.
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| Posted 2/28/12 4:57 PM |
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Lisko73
LIF Infant
Member since 1/10 291 total posts
Name:
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Re: Short sale- please give me the good, the bad and the ugly
Message edited 2/28/2012 11:03:19 PM.
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| Posted 2/28/12 5:32 PM |
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Re: Short sale- please give me the good, the bad and the ugly
Posted by Lisko73
You can buy before the two year mark, if your payments were on time (never faltered on mortgage payments), but if would have to be an FHA loan. Two year wait for an conventional loan. This is what I have been told, and yes your credit does take a hit. HTH
I've never heard that you can buy again sooner if you opt for an FHA loan. FHA still has minimum credit requirements, even though the requirements are a bit stricter for conventional loans. Last week, I was talking to a mortgage loan officer with whom I often work and who does a LOT of FHA loans, and he confirmed that someone who short sells their house will typically need to wait about 2 years to buy again, regardless of the type of mortgage they get.
Your credit will definitely take a hit... That's the real reason why it is hard to buy again. A short sale shows up as a "charge off" -- basically a debt that is unpaid and won't be repaid. So this will not only affect your ability to get a mortgage, but also other forms of credit (car loans, credit cards). But it usually takes a couple of years to re-build your credit to the point that you can qualify for a mortgage loan again.
Also, other things to consider about a short sale is that you need to make sure that your bank will allow you to do one. Most banks will require you to show that you have suffered some hardship that makes it necessary for you to do the short sale. "Hardships" are usually along the lines of death, illness, divorce, job loss, job transfer... so often just wanting to sell is not enough. It also takes longer to sell and is more burdensome for the seller. You need to provide a lot of information and financial documentation to your bank, and even if you find a buyer immediately, you will need to wait for the bank to approve the sale, which may or may not take awhile (depending on the bank/banks involved).
There can also be tax consequences to doing a short sale.. so I think it's always wise to consult with an accountant before you proceed.
Bottom line - short sales are sometimes the best or only option. For some people, they are the only way out of a very tough situation. But they aren't for everyone and shouldn't be taken lightly, because there are future repercussions.
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| Posted 2/28/12 6:51 PM |
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LIMOMx2
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Member since 5/05 24989 total posts
Name:
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Re: Short sale- please give me the good, the bad and the ugly
Our old house is a Short Sale. Your credit will be hurt because for the most part, you have to not pay your mortgage in order to even qualify for a Short Sale. We were told 2 years for another mortgage. Thankfully we didn't need a mortgage for the new house.
Our house has been on the market with 2 offers for almost a year. We are having major problems with Bank of America.
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| Posted 2/28/12 9:07 PM |
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LIMOMx2
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Member since 5/05 24989 total posts
Name:
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Re: Short sale- please give me the good, the bad and the ugly
Oh and if you make a decent amount, with little hardship, the bank can make you repay the difference.
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| Posted 2/28/12 9:09 PM |
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waterspout4
My loves
Member since 5/06 19150 total posts
Name:
Kelly
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Re: Short sale- please give me the good, the bad and the ugly
I knew it wasn't as simple as that realtor made it sound.
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| Posted 2/28/12 9:52 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Short sale- please give me the good, the bad and the ugly
the FHA rule is 2 to 3 years
I deal with this every day- they really need to make realtors have to be certified to do short sales- too many uneducated agents making it harder for everyone
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| Posted 2/28/12 10:05 PM |
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meganNbobby
Our Family is Complete
Member since 5/05 2774 total posts
Name:
Megan
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Re: Short sale- please give me the good, the bad and the ugly
Nope cannot rebuy right away, we shortsaled last year took us about a Year to get done.
If youre ok with it, stop paying now, the banks wouldn't take us seriously until we stopped paying. We kept paying thinking we were doing a good thing but it was hindering the process. Now we are renting and its such a huge weight off our shoulders. We bought Our house for 328k in 2005 and we tried to keep it and rented it out for 2 yrs in 2008 still paid 1k towards the house each month then it was empty for about a year and we shortsaled in 2011 for 290k. Just wish we shortsaled sooner and stopped paying so we could saved more $$$. We couldn't not afford our mortgage payment because dh switched careers and was in the NYDOC academy and his salary dropped 40k. Better secure job but less salary. You have to have proof you can not pay it anymore. We had a great lawyer who did it all!!
Good luck
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| Posted 2/28/12 11:04 PM |
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