We are back to answer a few questions about distressed home sales. A lot of people went through foreclosures and short sales during the recession, and a lot of them are now curious about when they can get back into the market. Others bought during the recession and haven’t quite been able to stay above water, so they want to short sell their homes. Let’s discuss the wait period first. People have been asking, “When can I buy a home again?”
If you want to buy a home with conventional financing after going through a short sale, you will have to wait four years. After a foreclosure, you would have to wait seven years. This loan has a limit of $417,000. If you want to buy with an FHA loan, which has a limit of $271,050, you’ll only have to wait three years. This goes for both short sales and foreclosures.
The second question I’ve been getting is “How do I short sell my house?” Unfortunately, this question is becoming all too common. The market is still about 20% off from where it was at the peak in 2007, and if you’re underwater and can’t sell traditionally, a short sale can be a great option.
The best thing about doing a short sale right now is that the Mortgage Forgiveness Debt Relief Act is still in play through the end of 2016. Congress could extend this out, but as of now, they have not. You still have several months to take advantage of this act through a short sale, which will forgive you from paying taxes on an owner-occupied residence that you want to short sell.
If you have any questions for me at all, don’t hesitate to reach out. I can answer all your real estate questions and point you in the direction of an experienced loan officer to answer any mortgage-related inquiries. I look forward to hearing from you soon!