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More former homeowners want to buy new homes after short sale, foreclosure

Losing a home to a foreclosure or short sale doesn't appear to faze many people's dreams of home ownership. A number of real estate agents say they have been receiving calls from former homeowners wanting to know when they can buy a home again.

According to Ed Arriola of Coldwell Banker, he has been receiving calls nonstop from buyers coming off a foreclosure or short sale. Most of them feel ready to take out new mortgages, or simply want to take advantage of the low mortgage rates and price cuts.

There is usually a three- to seven-year wait time after a foreclosure before a person can buy another home. For short sales, the wait time depends on the servicer's policies - the average wait is two years, but one can buy immediately afterwards if they did not miss any payments prior to the short sale.

Many believe it's best to complete the official wait times before buying a new home, as it will give buyers the time to rebuild their credit and get more agreeable mortgage rates. For them, prematurely taking out a new mortgage can leave a buyer stuck with terms they cannot keep up with, and put them back in default not long afterwards.

A short sale generally lowers one's credit score by 80 to 200 points, while a foreclosure has a larger impact of 300 to 400.

Arriola believes that the next home buying wave will be made up mostly of borrowers who will have then finished their wait times and recovered enough to qualify for conventional mortgage loans.