Question about foreclosure...?

Question

Ok if me and my husband do a "short sell" and sell our house before it actually forecloses, what are the chances of another mortgage company giving us another mortgage for another house? We have a family so living in an apartment really isn't the best option for us right now and our credit isn't really that great either. But we definitely plan on getting a much cheaper house for now. Thanks!!!

Answer 1

I think that anything you can do to avoid the actual foreclosure is going to help you.

You may have late mortgage payments listed on your credit report but I would think that would be much better than an actual foreclosure.

After that your credit score will determine what interest rate you are eligible for and possibly how much down payment will be required.

You should get pre-qualified with at least 3 mortgage companies to make sure that you are getting accurate quotes. If you get all the applications in within a 30 day period, it will only show as one inquiry on your credit. As you probably know, too many credit inquiries will lower your credit score and that's the last thing you want as you are trying to buy a house. You might have to pay for a credit report with each company but make sure that it is an actual pre-approval. Then you'll know what you're up against.

Depending on what shape your credit is in, it might be smart to rent for a couple of years. Time heals credit scores too as long as you keep your debt down and don't rack up any more negative entries...

Hope this helps and good luck with your new home.

Answer 2

If you're doing an actual 'short sell', in which the lender is going to take a financial hit with your agreement, don't expect to get another mortgage soon. A short sale will show up on your credit report, even if with the lender's agreement.

Put yourself in another lender's shoes. Would YOU be willing to give a mortgage to someone who stiffed the previous lender who gave a mortgage ?