Many people find themselves in unfortunate circumstances where they are having trouble making payments on their property. If you find yourself in this situation, you may consider short selling your property as a last resort in order to avoid foreclosure. Whether you are planning to list a short sale or are considering buying one, it’s essential to work with a certified expert in short sale investments—you don’t want to make mistakes due to misunderstanding these often complex transactions.
Recently, Fannie Mae changed its regulations regarding the waiting period in a clause that is important to understand. Starting August 16, 2014, the waiting period for someone who short sells their home or goes into foreclosure has increased from two to four years. At present, the waiting period is two years, if the buyer’s credit is clean and they can come up with a down payment of 20 percent.
If you recently went through a foreclosure or executed a short sale of your property, four years may seem like a long time period to wait. However, there is a caveat that benefits such prospective buyers—those interested in buying after four years from the date of their short sale or foreclosure will be able to follow standard Fannie Mae guidelines. This means if their credit stays clean, they only need to make a five percent down payment on the purchase of a new home. Additionally, if a buyer can provide certified documentation that proves that their short sale or foreclosure was the result of extenuating circumstances such as lost wages or unemployment, the waiting period may be reduced to two years.
No matter whether you’re a buyer, seller or both, it really helps to have a certified expert in short sale investments in your corner to help you navigate such a complicated transaction. As you can see, regulations change and the process can take a lot of work, so you need to work with an expert to minimize risk and execute a successful transaction.
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