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Short selling a home does not prevent getting a future mortgage

Residents of South Carolina that are facing foreclosure have many difficult decisions to make. Their future may be incredibly uncertain, and it may seem as if getting another mortgage will be impossible. However, homeowners all around the country should consider short sales as an alternative to foreclosure. With a short sale, the dream of owning your own home does not have to come to an end - it's been proven many times that another mortgage can be obtained after the short sale of a home.

One woman from California was able to secure another mortgage in 2012 after short selling her home in 2010. Her husband suffered a back injury, and the medical payments left them unable to afford the $2,500 they needed each month to pay their mortgage. They were able to get a new mortgage by being very disciplined about their credit after the short sale.

A short seller will usually have to wait a specific amount of time before they will qualify for another loan. For example, short sellers that provide a down payment of 20 percent only have to wait two years before they'll be qualified to get a mortgage. A down payment of 10 percent leads to a wait of four years, and anything less than 10 percent requires waiting seven years.

Loans from the Federal Housing Administration require a waiting period of three years from the date of short sale. If you can qualify for a Veterans Affairs loan, you'll only have to undergo a two-year waiting period with no down payment. One mortgage expert states that an FHA loan will generally have the shortest waiting period for borrowers that can only provide less than 10 percent down. Also, short sellers can qualify for the exact same FHA loans that are available to people who have never gone through a short sale or foreclosure.

There will still be some obstacles to overcome, however. Borrowers are often required to have a credit score above 680 to qualify for a mortgage. Also, lenders will want to know the exact circumstances under which the borrowers made the short sale. A qualified real estate attorney can help any South Carolina resident deal with these obstacles and provide assistance throughout the entire short sale process.

Source: chron.com, "It's possible to get a mortgage after a short sale" Polyana da Costa, Dec. 05, 2013

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