Short Sale- Do we have to wait?

[creditjail]

I had to relocate due to promotion I received at work.  My husband and I tried to sell our home (in husbands name, owned home prior to our marriage) however, the market in the area was not too great and a few buyers financing fell through.  After about a year and half of paying mortgage and rent we decided to do short sale. Although we were going through short sale we continued to pay mortgage.  We have no late payments for our mortgage but after the short sale my husbands credit took a dive, as we expected. We've been told we have to wait 2 years after short sale before we can purchase another home.  Do you think we can find a bank to make an exception, considering we paid mortgage each month up until closing?  

My mid credit score is 720

Husband credit score is 610

Note:  We want to use both incomes to qualify

Thanks in advance for any feedback

[Anonymous]

Unfortunately no way around the waiting period.

[NC_Mtg_Loaner]

 You might find a loan prior to the two year waiting period, but it might be like trying to find a needle in a haystack as you search for a portfolio lender (In-House Servicing of your Loan) that will likely require at least 20% down payment and an interest rate slightly higher than market.

[StartingOver10]

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@creditjail wrote:

I had to relocate due to promotion I received at work.  My husband and I tried to sell our home (in husbands name, owned home prior to our marriage) however, the market in the area was not too great and a few buyers financing fell through.  After about a year and half of paying mortgage and rent we decided to do short sale. Although we were going through short sale we continued to pay mortgage.  We have no late payments for our mortgage but after the short sale my husbands credit took a dive, as we expected. We've been told we have to wait 2 years after short sale before we can purchase another home.  Do you think we can find a bank to make an exception, considering we paid mortgage each month up until closing?  

My mid credit score is 720

Husband credit score is 610

Note:  We want to use both incomes to qualify

Thanks in advance for any feedback

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Agree with the others. It's possible that your timely payments throughout your short sale will be a compensating factor in your new mortgage, you would need to ask the LO that takes your application that question.

The time to qualify can be used to increase your husband's mortgage scores.  I am assuming that you are quoting your mortgage scores above and not your FICO 8's.  

Remember, when qualifying for a mortgage, the lender will use the lowest mid-score to qualify you.  So take the time to increase your husband's score as much as you can and to save as much as you can. 

[VALoanMaster]

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@creditjail wrote:

I had to relocate due to promotion I received at work.  My husband and I tried to sell our home (in husbands name, owned home prior to our marriage) however, the market in the area was not too great and a few buyers financing fell through.  After about a year and half of paying mortgage and rent we decided to do short sale. Although we were going through short sale we continued to pay mortgage.  We have no late payments for our mortgage but after the short sale my husbands credit took a dive, as we expected. We've been told we have to wait 2 years after short sale before we can purchase another home.  Do you think we can find a bank to make an exception, considering we paid mortgage each month up until closing?  

My mid credit score is 720

Husband credit score is 610

Note:  We want to use both incomes to qualify

Thanks in advance for any feedback

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Hi Creditjail,

Here's the good news.

Since you were not late on the mortgage payments leading up to the short sale, you are considered eligible for both VA & FHA 12 months after the sale!

A lot of people read the FHA guidelines & fail to recognize that the guidelines simply state that if there was a short sale within the last 3 years, the loan has to be down graded to a manual underwrite. That does not mean that you have to wait for 3 years to be eligible.

VA doesn't have set guidelines for short sales so a lot of lenders either default to the FHA guidelines as an overlay or they default to the VA foreclosure requirements.

Which mortgage program were you looking at, FHA or VA?

[creditjail]

Thanks everyone for your feedback.  I guess conventional is out of the questions... So FHA.

[VALoanMaster]

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@creditjail wrote:

Thanks everyone for your feedback.  I guess conventional is out of the questions... So FHA.

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Yeah for a conventional loan it's a minimum of 2 years if you qualify under extenuating circumstances & will require at least 10% down for a Freddie Mac loan.

[VALoanMaster]

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@creditjail wrote:

Thanks everyone for your feedback.  I guess conventional is out of the questions... So FHA.

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I forgot to mention the 610 score makes a conventional loan prohibitive....