For those not familiar with a short sale, it’s a common practice today when home owners need to sell their property but the mortgage loan on the property is higher than the price they can get from the person buying their house. In this case the current bank that has the loan on the property you’re trying to sell has to take less than their owned. This is called a short sale.
It is much more common in today’s real estate market as property values have come down substantially in many markets across the U.S. Falling property values often force those who need to sell to pursue short sales.
Once you have a short sale on your credit record, many lenders will not approve you for a new mortgage loan until two years after the short sale occurred. But there is a source that I work with that will still approve you for a new VA mortgage loan (or FHA) immediately after you short sale your current home.
In many short sales, home owners have mortgage late payments leading up to the short sale. Some owners start missing payments in order to get their lender to consider a short sale. The source that I have generally wants you to not have any late payments leading up to the short sale. We will have to get you approved through the automated underwriting engine in order to get you approved for a new VA loan after your shorts sale, and in most cases you can’t have late mortgage payments and get through the automated underwriting engine.
In any event, if you are thinking about attempting a short sale on your current residence, please consult a tax professional and attorney first. Make sure you understand all the financial and legal ramifications if there are any. But this article is to let you know it still may be possible to immediately get approved for a new VA loan after a short sale of your house.
Some highlights of VA loans today:
- VA loans go up to 100% financing
- Sellers can pay all your closing costs on a purchase
- Maximum VA loans can get all the up to above $700,000 in many areas of the nation where jumbo VA loans are possible
- VA loan streamline refinance are easy to drop your interest rate to today’s low rates
- You don’t need great credit to apply for a VA loan, so if you think you have bad credit you still may be able to get a VA loan
- VA loan interest rates at record lows and being held down by the government to stimulate the economy, this won’t continue forever
- California VA Loans 100% to $737,000+ in many counties
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a conventional to VA refinance loan or VA purchase loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and VA specialist)
858-922-7899
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