How soon can one own a property again after short selling?

There was once an era when nobody had heard of the term “short sale,” much less done one. At the moment, with the housing crisis dragging on for years, and the economy remaining slow, it’s practically a household term.

Things have changed, and tens of thousands of property owners have sold their residence with a short sale. As a result, many people really want to know how soon they can get a residence following a short sale.

There is often a good deal of hype and misconceptions about the repercussions of selling your home via short sale, but the answer simply speaking is quite simple: You can acquire a house again generally a couple of years following short selling your previous home. Circumstances will vary, and there will never be a cast in stone rule, but it is practical realistically to achieve it.

To help you have the best chance of buying a home again after two years have passed from your short sale, you need to follow some very simple tips to getting your credit back in shape.

First, make certain your credit profile reads the house loan on your home was “Satisfied.” Legally, it was, even if they received a lot less than the amount of the loan, because they agreed to do so. The bank could have said ‘no’ and taken ownership of the home.

Second, you should make sure you make all payments when they’re due without exception. No matter what credit cards you have, pay them conscientiously (then pay them off as soon as possible!).

Third, be sure your debt to credit limit ratio on any given line of credit, and on all lines of credit put together, is lower than 50%. This shows you are a good credit risk and tend not to get into too much debt.

Fourth, maintain at least three different trade lines of credit. A trade line is a category of credit, like a car payment vs. a credit card vs. a cell phone. Wireless phone and Internet service accounts are valid trade lines, as are college loans, and any unsecured debt. You should exhibit a balance between opening and managing credit accounts and paying them down so you don’t end up being overburdened with debt.

And fifth, check your credit score rating long before you make an application for a home loan so you’re able to find any discrepancies and get them corrected. You do not need to use pricey “credit repair agency” schemes. Just get your finances in order and always maintain them this way and your credit standing will indicate your credit worthiness.

Mr. Harper is a writer and consultant focusing on topics such as Orlando real estate, Marco Island real estate, and other real estate topics. He publishes a free ezine on real estate marketing tips to help small business clients succeed.

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