On Tuesday, I wrote about what to do to buy a house after a foreclosure. I didn’t think to include anything in reference to buying a house after a short sale, but several people have already asked, so I figured I would address it here. Buying a house after a short sale is much like buying a house after a foreclosure. You need to reestablish your credit lines, rebuild your credit, and clear up outstanding debts such as collections, liens, levies, and judgments. You also need to wait the same 12 months to three years based upon whether or not you qualify for a financial hardship exception.

What differs is how the short sale impacts your credit score and the willingness of banks to lend to you. There is generally a smaller hit to your credit score for a short sale, meaning you need to do less to recover. And since you are selling the house and repaying the bank, even if it is at a lower amount than you borrowed, it will make banks more willing to work with you in the future.

So if you have already gone through the foreclosure/short sale process, all you can do is rebuild your credit and move forward. If you are thinking about buying another house, it probably makes sense to contact a qualified mortgage officer to help you through the process. You certainly don’t want to find yourself in a situation where you want to buy a house, you feel financially prepared again, but you are unable because you didn’t follow the right steps.

If you have any questions about buying a house after a short sale or a foreclosure, or if you need a preapproval letter, please contact me. If you have anything to add about buying a house after a short sale, please leave a comment.