Born Again: How Long Do You Have to Wait After a Short Sale, Bankruptcy, or Foreclosure?

by Alex Stenback on August 26, 2011

(click image to biggify)

At nearly 4 years (and running) into the real estate downturn, one question we still hear all the time is:

“When will I be able to buy a home again if I go through a foreclosure, short sale or bankruptcy”

 With that in mind, the chart above illustrates the standard waiting periods for borrowers looking to bounce-back after a significantly negative mark on their credit.

Two key points of understanding here are :

1.  The impact of these events are not permanent.  Sure, you will likely always need to explain them, and provide additional documentation, but they won’t always stop you from getting a mortgage. 

2.  Just because the required time has elapsed, you are not automatically eligible for financing.  Good credit must be re-established ,and  income, assets and other criteria must all meet guidelines at the time you purchase a home, regardless of prior history.

The take away?  Even if you go through a foreclosure or short sale, or file bankruptcy, there will be a day – and sooner than many think – where you will be able to finance a real estate purchase again.
Are you a home buyer looking to bounce-back?  Do you need a better understanding of how these rules might apply to you?  Feel free to drop me a line with a few notes about your situation and I will do my level best to get you pointed in the right direction.

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