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Refinance a primary loan after short sale on an investment porperty

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henchita
Established Member

Refinance a primary loan after short sale on an investment porperty

Not sure if anyone knows this, but in November 2012 we had to short sale on our investment property that I had purchased when I was in college to live in.  Unfortunately, the banks would not help us refinance since it was upside down, but after 10 months they decided on a short sale.  Unfortunately in order to even be considered for a short sale they had me miss payments since this would be the only way to show I needed help.  So I stopped paying and I had up to a 120 day late on the property, which is obviously reported on my credit.  Now however it is still there but says "closed for less than owed."  My question is, how soon would i be able to try to refinance my primary mortgage with this on my credit report?  I was thinking I could try about a year after I short sale on the investment property?  I have no other lates and never had any lates, my score dropped from 760 to 593 in November, but I checked it recently and its at 660 according to FICO.  I am waiting until I get to 720 to try to apply, but will banks even care about a score if I have a past short sale on a property?  Any Advice...


Starting Score: 590
Current Score: 704 TU, 660EQ
Goal Score: 720 ALL


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adymax
Contributor

Re: Refinance a primary loan after short sale on an investment porperty

I had a deed in leau almost 3 years ago but my credit score droped from upper 700s to lower 700s. I'm suprised yours dropped so much.

 

With short sale you can get a convetional loan after 2 years if you put 20% down or more or 3 years for FHA loan. Mor einfo here:

 

http://buyagainafter.com/short-sale/

 

 

Message 2 of 5
Walt_K
Senior Contributor

Re: Refinance a primary loan after short sale on an investment porperty


@adymax wrote:

I had a deed in leau almost 3 years ago but my credit score droped from upper 700s to lower 700s. I'm suprised yours dropped so much.

 

With short sale you can get a convetional loan after 2 years if you put 20% down or more or 3 years for FHA loan. Mor einfo here:

 

http://buyagainafter.com/short-sale/

 

 



A 120 day late on a mortgage can be treated the same as a foreclosure depending on how it is coded.  I think it depends on something called MOP or method of payment.  It's been a while since I looked at this so not sure if I have the terminology correct.  The waiting period for FHA for a foreclosure is 3 years, so even if your 120 day late is treated as a foreclosure, the article's 3 year waiting period would still be correct.

 

Because the article doesn't address the issue of how late you went, I'm not sure the conventional waiting period fo 2 years with 20% down will apply.  If that late is treated as a foreclosure, you may have to wait the full 7 years for conventional.  


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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henchita
Established Member

Re: Refinance a primary loan after short sale on an investment porperty

Geez if that's the case, I should have foreclosed instead because I forked over $6000 plus taxes to do the short sale.  Live and learn I guess. thanks for your help


Starting Score: 590
Current Score: 704 TU, 660EQ
Goal Score: 720 ALL


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Walt_K
Senior Contributor

Re: Refinance a primary loan after short sale on an investment porperty

I wouldn't give up on the idea of refinancing before 3 years/7 years.  There are people who have reported getting loans earlier when they have a 120 day mortgage late.  I think it just takes a lot of work.  Something to do with automatic underwriting flagging it the same as a foreclosure.  Like I said, it has been a while since I looked at this, so I do not remember all the details.  I'd use this as a springboard for further research to see if it is possible.  I just don't want you to give up if I may be giving outdated information.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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