I was interested in opinions on my situation and any challenges I might face when shopping for a new home (and or tips). Here is my scenario.
We live in a home we purchased in 2009 in TX. We purchased this home after being transferred from Phoenix where we owned a home that was severely underwater at time of transfer. We hung in as long as we could, renting the Phoenix home for $1000 less per month than cost to maintain. We eventually short sold the property in Mar 2011. We had two loans (first and second) that report on our credit reports as settled for less than full value. Both loans report 120+ days delinquent due to lender refusing to consider our short sale until we were 90 days past due. It took an additional 60 days to navigate the process once the lender began working with us. Credit scores were 803 and 825 pre-shortsale.
Fast-forward to now: We have not been late on any other payment ever. This includes 5 years of on time payments for current home. Credit scores have crept back up to 705 and 733. We carry $0 in credit card debt (pay in full each month). We have two car loans that total $1150 per month, this amount is covered by my companies monthly car allowance.
We are looking to purchase a new home after selling our current home. With the sale of our home and a bit of additional savings, we plan to put down $200,000. We hope to purchase the new home for $580,000. We are looking to take on a 15 year mortgage.
Although I know there is much more information needed to complete the equation, I'm just looking for general opinion on my likelihood of approval and any tips to improve my chances.
So, $580,000 price putting $200,00 down would be a $380,000 loan amount at a 65% loan to purchase price. $380k loan amount is ok for conventional financing and the wait time in the scenario above would be 2 years provided you put at least 20% down.
There is an FHA option that has no waiting period, if you can prove 1.)no late payments on any mortgage and consumer debts within the 12 months period preceding the short sale. 2.) you are not taking advantage of a declining market condition.
You might also consider a USDA loan. Standard guidelines for shortsale:
Also, my Bank will do a purchase or refinance loan 1 day out of foreclosure or short sale in any of theses states: AZ, CA, DC, FL , HI, IL, MD, MT, NV, NY, NC, NJ, OR, SC, VA, WA..but not Texas :( Please contact me if I can be of service.
You'd want to check the max FHA loan size for the county you're looking in, as they vary and it could be as low as 271,000. In addition, both the upfront and monthly MIP (mortgage insurance premiums) would still apply, even with 20% down, and they are quite steep. From what you've said, however, your previous short sale should be a non issue, given your down payment. Glad to help if you'd like, I write loans nationally. Thanks, Ted