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Boston, Massachusetts Real EstateMassachusetts Realtor Explains Repercusions of Short Sales and Foreclosures
Following the mortgage meltdown in Massachusetts, many homeowners under water and facing foreclosure have opted to get out of their property through short sales. While a much better alternative than foreclosure, short sales are not without their own drawbacks and potential problems.
Short sales, as well as foreclosures, have the potential to seriously affect a homeowner's credit. Subsequently, the time it takes to get another home loan can be lengthy depending on the individuals credit and the type of loan they apply for. While Fannie Mae, Freddie Mac and FHA do not make loans directly to consumers, they set guidelines for lenders. If the Massachusetts home you sold short had an FHA loan, you can purchase another home immediately if there was no mortgage default involved in the short sale. If the homeowner was in default, there is a three-year wait to buy another home. If the borrower re-establishes good credit, there is a reduced wait. A short sale with a Fannie Mae loan requires a two-year wait if the borrower puts 20 percent down, a four-year wait if the borrower puts down 10 to 20 percent and a seven-year wait if the borrower puts down less than 10 percent. Extenuating circumstances will be taken into account, however. A Freddie Mac backed short sale requires the borrower to wait four years before getting a loan. If the borrower can demonstrate extenuating circumstances, the wait is two years. A foreclosure with a FHA loan requires a three-year wait before being able to get a loan. Good credit and special circumstances may reduce the wait. Foreclosure with a Fannie Mae loan requires a seven-year wait from the completed foreclosure sale. The wait is three-years if the borrower can show special circumstances. Foreclosure with a Freddie Mac loan requires a five-year wait from the foreclosure sale date and a three-year wait if the borrower can show extenuating circumstances. Whether considering a foreclosure or a short sale in Massachusetts, your credit score will take a serious hit. Overall, the lasting effects of each are about the same. You can talk about... Massachusetts Realtor Explains Repercusions of Short Sales and Foreclosures Tags: • lenders • consumers • fha • credit • drawbacks • mortgage • foreclosures • credit score • mortgage default • fha loan • freddie mac • fannie mae • home loan • mortgage meltdown • short sales • Related articles:
Massachusetts Realtor Explains Repercusions of Short Sales and Foreclosures Boston, Massachusetts Real Estate |
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