1. Rebuilt Credit.

2. Proof of 12 months rental history with no 30 day lates.

3. Short Sale agreement verifying the terms of the short sale.

Rebuilding your credit is critical to preparing to purchase again. The first thing to evaluate is how many open active accounts that you currently have. If you don’t have any you will need to open 3 to 4 accounts. Your credit score will not make the necessary improvements without having multiple open and active accounts. If your options are limited I would recommend opening several secured credit cards. Try your local banks first and then turn to the internet. Remember these cards should be used at least once every three months and only for minimal purchases. Do not max out the credit cards as this will trigger a high risk borrower’s activity and lower credit score. The lower your credit card balances, the higher your score.

Twelve months of rental history is also critical to owning in the short term. Underwriters will not usually sign off on a loan unless they can positively verify that the person(s) have shown 12 months of rental history without having a 30 day late. If you are living in an establishment that is managed by a management company your rental payment history can be verified through the management company. However, if you are paying your rent in cash I would recommend that you use checks or at a minimum cashiers checks/money orders. Make copies of the checks so that you can submit positive proof of rental payment history.

The Short Sale Agreement will verify the terms of the short sale which may verify that you are not obligated to repay the debt or that the debt was completely dissolved. If the short sale agreement confirms that you are repaying a portion of the debt then the debt must be included on your loan application. The short sale agreement and the HUD-1 or settlement statement should also be submitted to confirm the date of sale.

This information is intended to put former homeowners back on track to home ownership. The faster you start the process of rebuilding your credit the easier it will be for you to qualify in the future. Don’t allow fear to stop your progress. Chances are good that you will purchase a similar home for much less than you did before and at a more sustainable monthly payment. Credit scores are usually improved over time and the more time you have a trade line on your credit report, the more points you will receive on your credit score.