Can You Get a Loan After Having a Short Sale?

Individuals who sell a home through a short sale will have a damaged credit score. Having a short sale on your credit report and a lower credit score will not prevent an individual from being able to obtain a mortgage in the future.

Definition

A short sale takes place when a lender agrees to allow a home to be sold for less than the amount owed on a mortgage.

Credit Score

A short sale is reflected on the credit score in a negative way. The negative mark leads to a lower credit score.

Time Frame

After a short sale, waiting at least two years is advisable before applying for a mortgage. A short sale remains on a credit report for seven years.

Fannie Mae

After a short sale, Fannie Mae requires a borrower to wait 24 months before applying for another mortgage.

Tip

An individual's ability to qualify for a new home loan will be improved if there are no other negative marks on the credit reports. An inquiry into one's credit score should be done before applying for a new mortgage.

References

• Rebuild: How to Buy After a Foreclosure, Short Sale, or Bankruptcy