Will Short Sale Prevent Me From Getting VA Home Loan Later?
From MyFICO: A foreclosure remains on your credit report for 7 years, but its impact to your FICO® score will lessen over time. While a foreclosure is considered a very negative event by your FICO score, it's a common misconception that it will ruin your score for a very long time. In fact, if you keep all of your other credit obligations in good standing, your FICO score can begin to rebound in as little as 2 years. The important thing to keep in mind is that a foreclosure is a single negative item, and if you keep this item isolated, it will be much less damaging to your FICO score than if you had a foreclosure in addition to defaulting on other credit obligations. (personal note - I tip my hat to you, sir. Regardless of party, we owe our Vets a debt of gratitude. If I had my way, a VA loan would ignore the past short sale. I wish you well. And thank you for serving)
The buyer discloses the financing arrangements to the seller because it makes his offer more attractive. When a seller receives and accepts an offer, the deal does not usually close until 30 to 60 days later.  If the buyer cannot come up with the money by closing, the deal falls apart.  This is a risk for the seller. When a seller is considering whether or not to accept an offer, it is helpful to know the likelihood that the buyer can actually obtain the amount of cash in the offer by the closing date.  If the buyer can't acquire the funding, the offer isn't worth the paper it is printed on. The amount of the down payment vs. the amount of financing is also relevant to the seller.  Let me give you a real-world example that happened to me once when I was selling a house.  The buyer was doing a no-money-down mortgage and had no money for a down payment.  He was even borrowing the closing costs.  We accepted the offer, but when the bank did the appraisal, it was short of the purchase price.  For most home sales, this would not be a problem, as long as the appraisal was more than the amount borrowed.  But in this case, because the amount borrowed was more than the appraisal, the bank had a problem.  The deal was at risk, and in order to continue either the buyer had to find some money somewhere (which he couldn't), or we had to lower the price to save the deal.  Certainly, accepting the offer from a buyer with no cash to bring to the table was a risk. (In our case, we got lucky. We found some errors that were made in the appraisal, and got it redone.) It's great that vets have loans available to the that offer additional protections, but in a seller's market, which we are completely in, buyers should realize they need to make their offers as attractive as possible with as few barriers as possible. I recently put in an offer on a house, but was outbid by another offer to only have the seller come back a week later willing to accept my offer for 5K less because the other offer was a VA loan and they didn't want to deal with the hassle.  That being said, affordability aside, vets can get non-VA loans, so it's not like they have no options to make themselves more appealing to sellers. "As the other answer said, the person who owns the lent stock does not benefit directly.  They may benefit indirectly in that brokers can use the short lending profits to reduce their fees or in that they have the option to short other stocks at the same terms.   Follow-up question: what prevents the broker lending the shares for a very short time (less than a day), pocketing the interest and returning the lenders their shares without much change in share price (because borrowing period was very short). What prevents them from doing that many times a day ? Lack of market.   Short selling for short periods of time isn't so common as to allow for ""many"" times a day.  Some day traders may do it occasionally, but I don't know that it would be a reliable business model to supply them.  If there are enough people interested in shorting the stock, they will probably want to hold onto it long enough for the anticipated movement to happen.   There are transaction costs here.  Both fees for trading at all and the extra charges for short sale borrowing and interest.  Most stocks do not move down by large enough amounts ""many"" times a day.  Their fluctuations are smaller.  If the stock doesn't move enough to cover the transaction fees, then that seller lost money overall.  Over time, sellers like that will stop trading, as they will lose all their money.   All that said, there are no legal blocks to loaning the stock out many times, just practical ones.  If a stock was varying wildly for some bizarre reason, it could happen." I would tell the former owner that you will sell him the house for you current loan balance. He wants the home, he may be willing to pay what you owe. You can't really do a short sale unless you are behind on your payments. Banks only agree to a short sale when they think they are going to have to foreclose on the property. Not to mention a short sale is almost as bad as a foreclosure and will wreck your credit. If the former buying is not willing to buy the house for what you owe your only real option is to come up with the difference. If he offers you say $50K less than you owe, you will have to give the mortgage holder the remaining balance $50K in this example for them to release the property.  Another problem you will face, if the former owner is willing to pay more than what the house is worth, and he is going to finance it, he will have to have enough cash to put down so that the loan amount is not more than the property is worth. Finally if none of that works you can just hold on to the property until the value comes up or you mortgage is payed down enough to make the balance of the mortgage less than the value of the house. Then offer the property to the former owner again. "It is possible and it depends on your strategy. As short selling interest rates are annual and levied monthly at a prorated rate. Interest rates are also low in general, with the exception of hard to borrow stocks. Therefore you can maintain a short position for weeks on end and notice nothing. Months even, if the position itself has already gained in your favor. There is no additional fee for opening the short position. Although some brokers have a ""locate"" fee, if it is hard to borrow the stock and they need to go find some shares to short. So you can do it as much as you like." "There are a few of ways to do this: Ask the seller if they will hold a Vendor Take-Back Mortgage or VTB. They essentially hold a second mortgage on the property for a shorter amortization (1 - 5 years) with a higher interest rate than the bank-held mortgage. The upside for the seller is he makes a little money on the second mortgage. The downsides for the seller are that he doesn't get the entire purchase price of the property up-front, and that if the buyer goes bankrupt, the vendor will be second in line behind the bank to get any money from the property when it's sold for amounts owing. Look for a seller that is willing to put together a lease-to-own deal. The buyer and seller agree to a purchase price set 5 years in the future. A monthly rent is calculated such that paying it for 5 years equals a 20% down payment. At the 5 year mark you decide if you want to buy or not. If you do not, the deal is nulled. If you do, the rent you paid is counted as the down payment for the property and the sale moves forward. Find a private lender for the down payment. This is known as a ""hard money"" lender for a reason: they know you can't get it anywhere else. Expect to pay higher rates than a VTB. Ask your mortgage broker and your real estate agent about these options." Sit down with professional with knowledge about eldercare issues. Know how your options regarding the property ownership can impact the services they qualify for. Even making a change in ownership can impact their eligibility for certain programs. Some of which can reach back to events in the recent past. Also if you own it but she will get some of the profits when you sell, she could still be considered an owner, which can impact eligibility for programs. This is in addition to the issues with the lender, the IRS, and your estate. "Yes, you could sell what you have and bet against others that the stock price will continue to fall within a period of time ""Shorting"".  If you're right, your value goes UP even though the stock price goes down. This is a pretty darn risky bet to make.  If you're wrong, there's no limit to how much money you can owe.  At least with stocks they can only fall to zero!  When you short, and the price goes up and up and up (before the deadline) you owe it! And just as with stocks, someone else has to agree to take the bet.  If a stock is pretty obviously tanking, its unlikely that someone would oppose your bet. (It's probably pretty clear that I barely know what I'm talking about, but I was surprised not to see this listed among the answers.)"