It is no surprise that a large portion of the population is still under water on their mortgage. That doesn't stop the fact that things happen in life and you may need or want to move to a different home. So that begs the question. How long after I short sell my home can I get a mortgage for a new home?
The answer isn't so cut and dry and depends on a couple factors.
1. If you are current on your payments with your current mortgage, you can short sell your home (given your banks approval) and can immediately qualify for a new FHA loan.
2. If you are not current on your payments, The FHA has recently relaxed restrictions, but you still must wait 2 years from the short sale to qualify for the new loan. If you can show certain other economic hardship variables such as a decline in household income by 20%, but have otherwise kept up to date with credit payments in 12 months time you can be eligible through the FHA's "Back to Work" program.
All is not lost when it comes to an underwater home. A short sale is certainly better than foreclosure or bankruptcy for all parties involved.
