July 17, 2014 BY Utechservs
There are big changes coming down the pike from Fannie Mae regarding short sale wait times. The current wait time buy a new home after a short sale or a deed in lieu of foreclosure has been two years. Starting August 16th, 2014, this will double, from two years to four,making prospective home buyers wait FOUR YEARS, or face financing their new home through the FHA.
This major change is impacting buyers that had their short sale only 2-4 years prior and are currently ready to buy their next home.Fortunately, there options available for those that are past the two year mark and have their 20% down payment ready to go for their new home. Even if they have not selected a home or are still pondering their choices, they can still get into a new home if they act now.
D/U Approval Needed Before August 15th, 2014
To ensure prospective home buyers do not need to wait another year or two after their short sale to buy a home, applying for a D/U approval on their application needs to be done before the new rule goes into effect. The application must be D/U approved before August 15th to meet the deadline. Approval takes up to five days, so applications should be in by the 10th at the latest. In addition, there are costs to get this approval:
– A 1.75% funding fee at close of escrow. On a loan of $500,000, this would be $8,750
– A 1.35% monthly insurance premium. This only will be paid until they can refinance their home into a conventional loan.
If you are currently looking for a new home after you went through a short sale or a deed in lieu of foreclosure 2-4 years ago, call me today to get your loan application D/U approved. There is still time to meet the deadline, even if you have not found the home you want to buy yet. Call me right away so I can help you get this process started!