SHORT LASE AND BUY AFTER TWO YEARS

[Kaj25]

Good Morning,

My current home is valued at $180k we bought it for $310k we owe $300k at the moment, when we bought it we where family of 3 now we are family of 5, our town home is back to back, no basement. We would really like to buy a new home but we have to put 20% for the new home, we went to see our loan officer who helped us secured loan for the current home and his advice is to short sale our house rent for two years and buy again, which is around the same time we want to move. The said it would be really difficult for us to prove to lenders that we can maintain two home, which is what we wanted to do rent our twon home and buy a bigger place but he doesnt think lenders will be willing to give us a loan. He also said that we will be able to buy again in two years, I have googled and googled everywhere I cant see anywhere where it says you can buy 2 years after short sale. The current home is on my husband name and my income is not sufficient enough to buy a new home on my own. Every article i found online it says if you short sale you cant buy for another 5-7 years. Any advice will be much appreciated, I also apologized if this question was asked before I couldnt find anything similar on the forum.

[penguin11]

Hello

You can buy again using Convention loan after 2 years, minimum 680 FICO with 20% down, link below, good luck!

http://www.findmywayhome.com/home-mortgage-news/how-long-do-i-have-to-wait-after-a-bankruptcy-short-...

[adymax]

Hi,

This is what we did. We tried a a short sale but the market was really bad 3 years ago so after about 6 month we gave up and did a voluntary foreclosure (deed in lieu )-contact your lender and tell them you want to do a deed in lieu.  We will have 3 years at the end of September and we are ready to buy a new home with FHA loan.   You have to wait 3 years with deed in lieu before you can get a loan again or 2 if you can put 20% down payment and get conventional.

Good luck!

[Kaj25]

Thank you so much for responding, someone else just scared me saying that IRS will come after us as our cancelled debt will be gross income. I am contacting the lender now to start the process. 

[Kaj25]

Thank you so much for the info, great help.

[sugspc1]

Its depends on what state you live in that the IRS can come after you for that balance. I live in GA and they can. The likely hood is slim but if it's a good amount of money it's very possible. We have a home that is underwater and we decided to rent the home out for 2 years to provide a rental history. We moved out of that home and rented the a home until we were ready to buy. Now we are purchasing a new home with a great rate and have a renter signing another year lease with us. Being a landlord isn't bad. It has it's ups and downs. I suggest using a real estate agent to help you find renters. They do the screening for you to find a good renter. Plus your credit scores will not drop.  If you have a score of 800 then most likely it will drop over 100 points and finding a mortgage is going to be tough!  Lenders are getting picky and want good credit. Or be prepared to bring some money to the closing table!

[adymax]

You have to pay tax on cancelled debt. When we didi it IRS had tHome Foreclosure and Debt Cancellation in place: http://www.irs.gov/uac/Home-Foreclosure-and-Debt-Cancellation   . I dont think they exteded it. 

[Kaj25]

Thank you, but i looks like Mortgage forgivess act was extended untill Dec 31 2013 by Congress but I cant find that information on IRS website but its widely published on the internet, confused!!

[adymax]

Hmmm. I see that but IRS website doesnt mention 2013  extention. This is weired. 

[Kaj25]

Yes, but it's every where else. I even found something on Library of Congress Website- American Taxpayer Relief Act 2012 Section 201

http://beta.congress.gov/bill/112th-congress/house-bill/8