Yes, you can own another home after a San Diego short sale. The short sale of your home does not mean becoming a tenant for life.
In fact, with careful money management, you can own another home just 2 or 3 short years after a San Diego short sale.
So that you’ll be ready, use this time to rebuild your credit scores and put some money away for a down payment.
Step #1: Pay down your other bills.
If you have other debts, and especially debts in arrears, start working to get them repaid. A “paid late” notation on your credit report looks better than a write-off or a judgment.
Check to see that you were cleared of all liability for your San Diego home loan when your short sale was finalized. If there’s a “deficiency judgment” against you, contact your lender and attempt to negotiate a pay-off for an amount less than you owe. Quite often, they will.
If Tom Dunlap helped you short sale your house, or if you sold after the new California laws regarding deficiencies went into effect, this should not be an issue.
Step #2: Check your own credit, even if you think you know what the report says
Order a free copy of your credit report from each of the major credit reporting bureaus. The bureaus are: Equifax, Experian, and TransUnion. Pay the extra few dollars to see your credit scores. Do get a report from all 3 bureaus, because they will probably not be exactly alike. Because it does cost money for businesses to report, some report to one bureau and not to the others.
Read the reports carefully to see that everything on them is true. Even the executives at FICO admit that over 70% of all credit reports contain errors. And while some are minor and can be ignored – such as a slight misspelling of your name – some of those errors can be damaging. All it takes is a keystroke error to put someone else’s debt on your credit report.
Watch for signs of identity theft, such as notice that you’re working for a new company, have a different spouse, or live at an address that isn’t yours. If you find such signs, contact the credit bureau and follow their advice.
If you find negative information that’s more than 7 years old, take steps to have it removed. The credit bureaus have forms for this purpose.
Step #3: Work on reestablishing your credit.
Become fanatic about paying every bill on or before the due date. As long as no new negatives are reported, time alone will repair your credit. You want to see those “Paid as agreed” notations on your credit report.
Keep your old credit cards and use them – but sparingly. The longer you’ve had credit with a given card company, the more positive influence it has on your credit scores, so don’t cancel any old cards and don’t stop using them entirely. Charge something every few months, then pay the bill when it arrives.
If you’re carrying credit card balances, work to bring them each down to 30% or less of the credit lines available to you.
Credit issuers like to see that you can handle more than one type of credit. So unless you already have them, apply for a small car loan or other fixed-payment installment loan. If you no longer have a credit card, go on line to research, find one that fits, and make application.
If your credit really suffered before your short sale, you’ll begin getting “bad credit” credit card offers in the mail. Before you choose one be sure to compare offers. There are HUGE differences. Some have initial fees almost equal to the credit lines they offer – and some have interest rates as high as 75%!
Apply for only one card. If you apply for several within a short period, it will signal that you’re desperate for funds and your scores will drop.
Once you have a new credit card, never use more than 30-40% of your credit line and always pay it down below 30% before the next billing cycle.
Step #4: Avoid Scams
Credit repair ads promising to rid your credit report of all negative information are scams. The only thing they’re going to remove is money – from you. In addition they could get you into legal difficulties, because some of the credit repair methods they promote are fraudulent.
What they can, but probably won’t, do is remove outdated or untrue information. And you can do that yourself by contacting the credit bureaus directly.
Legitimate debts, judgments, etc. cannot be removed by any legal means. They will, however, come off over time. You simply need to be patient and work on adding positive information to your credit report while the negative information fades into the past.
You can own another San Diego home. It will just take a little time and some careful money management.
If you aren’t sure whether you’re now qualified to purchase a new San Diego home, get in touch. We’ll be happy to discuss your situation and give you the benefit of our experience.
If you’re still just thinking of offering your home as a short sale, and wondering if you should or you shouldn’t, call 619-929-1413 or write firstname.lastname@example.org to get advice and straight answers from Tom Dunlap – San Diego’s top short sale specialist.
Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.
This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.