Closing Post-Short Sale/Foreclosure Date

Buyers that have patiently waited out tWaiting to Buy a Househeir short sale and/or foreclosure sentences want to know how quickly they can buy once they reach their “eligibility date” (the date at which the mortgage world says they can buy after completing a short sale or foreclosure: SHORT SALE WAITING PERIOD  /  FORECLOSURE WAITING PERIODS – link pending update).   Now, I am not talking about how many years here.  No, this question comes to me from the more microscopic angle of “what minute on what day can I buy after my foreclosure/short sale?   An understandable and typically eagerly posed question.  Prior homeowners who have waited out their post short sale/foreclosure time-frames are often chomping at the bit to resume the pride of home ownership.   Today’s low Arizona home prices and record low Phoenix area mortgage rates only  add more heat to their already hot burning fire.

At What Minute Can I Buy Again?

Once a borrower has reached their eligibility date (a date at which point they can obtain a new home loan assuming they meet loan guidelines), they deserve to know exactly what minute they can stick the key to their new house into their new front door, turn it, push the door open and step pridefully into the new place they can now call home.  The answer is: that buyer can close the day after they reach their eligibility date.    They do not have to wait until their short sale/foreclosure anniversary date to write an offer or have an offer excepted.  The offer can be written prior to their anniversary date so long as the closing date is at least 1 day after the appropriate waiting period required by the guidelines set forth for the type of loan they are using to finance their Arizona home.

Let’s Look at a Sample Case:

Assume Joe and Mary Home-buyer closed on a short sale on August 15th, 2011.  They have applied for a Conventional loan with 20% down for the purchase of a new primary residence.  Here is how this would particular example would work:

I. Guideline/Waiting Period: In Joe and Mary’s case they need to wait 2 years after their short sale to qualify for a 20% down Conventional loan
II. Anniversary Date/Eligibility Date for new loan: August 16th, 2013 (2 years after short sale)
III. Date Joe and Mary can close on their new home: August 16th, 2013

It’s that simple!  Or is it?  One very important thing to keep in mind and to work with your Arizona Mortgage Lender on well in advance of actually writing a contract on a new home mortgage your pre-approval.  There are a number of little details that can pop up that may derail your home loan approval.   Many of these can be corrected/addressed if known about ahead of time.  One of the most common “surprises” that comes up is that many borrower’s previous short sales are inaccurately “coded” as a foreclosure on their credit report.  This is NOT shown on the front of a report so a borrower would NOT know that this has happened to them by looking at their credit report.  Instead, this occurs on the coding side of the report and is not visible  on a printed credit report.  As I write this article, I have an email sitting in my inbox from a client who found this out from their lender 1 week prior to closing.  Not a good situation.  Check this article out for more: SHORT SALE SHOWS FORECLOSURE.

Please call or email us today if you have any questions!

By Jeremy House
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Comments

  1. Thank you for this article! I have been anxious to know the “minute” I can buy again. Thanks again, this lifted my spirits!

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