New Mortgage Approval Time Frames After Short Sale

by Patrick from Crown Point, IN and by Jennifer from Denver, CO

Ask Kate about Fannie Mae and FHA mortgage approval after short sale, bankruptcy, deed-in-lieu of foreclosure, and foreclosure: Less than 3 years following a short sale on his home, Patrick's credit score has reached the high 700s. How long before he can be pre-approved for a mortgage and buy a home?


Jennifer's credit suffered when her ex-husband failed to fulfill the terms of their divorce. But in spite of IRS tax liens, Jennifer's now free to pursue a 15 year fixed rate mortgage refinance.

Ask Kate: Mortgage Approval After Short Sale

By Patrick M. from Crown Point, IN
Mortgage Approval After Short Sale

Hello there, Kate.

My question is in regards to when I can apply for a mortgage.

I had to sell my home by way of short sale April of 2013. My credit is back to the high 700's and I am gainfully employed.

Do I need to wait until the 3 year mark to apply for a pre approval? Any guidance will be greatly appreciated.

Cordially, Patrick M.

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Kate's Answer: Mortgage Approval After Short Sale

Hi Patrick,

Good job on that credit score! Wonderful that you're pursuing mortgage pre-approval!

However, you should know that mortgage approval depends not only on credit score but the amount of down payment, the reason for the short sale, and the type of loan program.

Fannie Mae Mortgage Approval Following a Derogatory Credit Event

Fannie Mae has brought down the mandatory waiting period from 4 to 2 years following bankruptcy, foreclosure, deed-in-lieu of foreclosure, and short sale if accompanied by extenuating circumstances and a 20 percent down payment.

Extenuating circumstances are defined by Fannie Mae as catastrophic events beyond one's control. For example, a serious medical condition or loss of job.

With 10 percent down, borrowers are looking at a 4 year wait. With a 5 percent down payment, a 7 year wait.

Read more about getting mortgage approval after short sale at...

FHA Home Loan Approval Following a Derogatory Credit Event

But what if you only have a minimal down payment saved? For these home buyers, there is FHA's Back to Work program. It boasts a 1 year waiting period with satisfactory credit to get mortgage approval after short sale, bankruptcy, deed-in-lieu of foreclosure, and foreclosure.

Read more about this low down payment option following an economic event at Buying a Home After Foreclosure: FHA Back to Work Program.

Best wishes,

Ask Kate

Ask Kate: Refinancing to Fixed 15 Year Mortgage After IRS Liens

By Jennifer H. from Denver, CO
Refinancing to Fixed 15 Year Mortgage After IRS Liens

Kate,

I was divorced in 2009. He was to pay off existing IRS taxes and didn't! So the IRS came after me and filed 2 tax liens on the house.

I've been working for years to get my credit stabilized. In addition to my existing mortgage, I have a home equity line of credit (that he charged up to the max, without my knowledge).

So I plan to refinance, consolidate both the first mortgage and home equity line, pay of the tax liens ($60K), and have a fixed 15 year loan in my name.

Good news - I make very good money and my credit score is finally back to 700.

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Kate's Answer: Refinancing to Fixed 15 Year Mortgage After IRS Liens

Hi Jennifer,

Wow! Congratulations, Jennifer, for working on your credit and keeping your home when the cards were stacked against you!

Jennifer is a good example of someone, who in the face of adversity, was determined to improve her credit. You can do it too! Read more at Reversing Credit Problems the Right Way.

15 Year Fixed Rate Mortgage: Good Deal for Homeowners

Are you wondering what Jennifer sees in a 15 year term? It will save you thousands of dollars plus you'll be mortgage free after 180 payments! Read more at The 15 Year Fixed Rate Mortgage: How to Pay Off Your House Fast.

Best wishes to Jennifer,

Ask Kate

Have You Seen These Ask Kate Answers

Got questions? You are invited to ask Kate for answers. Or post a quick comment or related question by clicking the link near the bottom of this page.

Tell a Friend

I need your help! Ask Kate goes head-to-head with big-box banks for space on the internet. Will you help me by sharing New Mortgage Approval Time Frames After Short Sale with your friends? Thank you!

> > Mortgage Approval After Short Sale

Click here to add a comment.

You can also ask Kate about your mortgage at Ask Kate About Buying a House.

Recent Articles

  1. Kate's Mortgage Rate Report August 11: Rates Bouncing Like a Ping Pong Ball

    Aug 11, 16 10:49 AM

    Kate's mortgage rate report for the week ending August 11, 2016: Rates Bouncing Like a Ping Pong Ball
    Mortgage interest rates have been bouncing like a ping pong ball: After last Friday's strong job report began pushing up mortgage rates, the market is now hinting at a reversal, with the 30-year hover…

    Read more

  2. Ask Kate how to avoid unauthorized mortgage rate extension fees

    Aug 11, 16 10:18 AM

    Ask Kate how to avoid unauthorized mortgage rate extension fees
    Ask Kate how to avoid unauthorized mortgage rate extension fees:

    After locking in her rate, the bank sent a Texan homeowner, Laura, notification of several thousand in fees that she must pay in order…

    Read more