Many think that just because they had a foreclosure or a short-sale or even a bankruptcy they cannot get a mortgage again however they can with the Martini Mortgage Group at Benchmark Mortgage. A person who lost a house to foreclosure, short-sale or had a bankruptcy were prevented from getting a new mortgage home loan until a certain amount of time has passed from the negative credit event. When these folks re-enter the housing market, they are referred to as a Boomerang Buyer.
During the housing crisis many families fell on hard times. Bad things happen to good people. According to data from CoreLogic (CoreLogic is a leading provider of consumer, financial and property data), 1.9 million homeowners that went though a foreclosure from the start of the housing crisis and now they are eligible for a home loan again.
Episode 017 of the Martini Mortgage Podcast which is hosted by Kevin Martini, was all about the ‘Boomerang Buyer’ and the waiting periods after a negative credit event such as a foreclosure, short-sale or bankruptcy until a new Fannie Mae or Freddie Mac (a.k.a. Conventional Loans or Conforming Loans) Home Loan can be secured. Episode 017 highlights how long one has to wait to get a low-downpayment loan with the Federal Housing Authority (a.k.a. FHA or commonly referred to as a FHA Home Loan) after a derogatory credit event. In addition Kevin Martini, the host of the Martini Mortgage Podcast, talks about the time period a Servicemember, Veteran or surviving spouse have to wait after a a foreclosures, short-sale or bankruptcy.
In the U.S. there was a housing crisis followed by what I call a mortgage renaissance and today we are in a period of expansion. This period of expansion, according to Investopedia started in the summer of 2009. Now the last housing crisis was one of the many reasons we went into a recession however it is important to know that a recession does not mean housing crisis.
Right now there has to be millions of Boomerang Buyer since 2018 marks more than 7-years since the peak of the housing crisis. You see 7-years is a magical number since most foreclosure either fall off one’s credit report or maybe better said…the 7-year mark opens a window for someone that had a past foreclosure.
According to CoreLogic, there were 4.4. million owner-occupied foreclosures completed since the year 2000 and ONLY 1 million have returned to owning a home. Many have not returned to the market after a foreclosure because they may believe they cannot buy a home again and secure a mortgage.
After a foreclosure one can secure a Conventional Home Loan or a Conforming Home Loan (NOTE: it is commonly called a ‘Conforming Loan’ sine this type of home loan conforms to Fannie Mae or Freddie Mac Guidelines) just 7-years after the negative credit event. Now you may not need to even wait the 7-years to get a Conforming Home Loan depending on the circumstances. In addition, if you are Boomerang Buyer, regardless of circumstance or why there was a foreclosure you may be able to re-enter the housing market and secure a mortgage and not have to wait the full 7-years since government loans like the FHA Home Loan and the VA Home Loan have less stringent timelines until you can secure a mortgage again.
FHA Loans are very powerful and homeowners have been using them since 1934. The FHA Loan offers a low down payment with low closing costs and I believe it provides an easy credit qualifying path. In addition, FHA Loans are most forgiving of mortgage options after a foreclosure or a short-sale…the waiting period is 3-years for both of these major credit events.
The Martini Mortgage Group at Benchmark Mortgage is very proud to have the privilege to offer the VA Home Loan. The VA home loan helps Servicemembers, Veterans and eligible surviving spouses. Again things happen and for these patriots it may happen while they are on the other side of the world. Servicemembers, Veterans and surviving spouses can bounce back faster after a bankruptcy, foreclosure or short-sale. With a foreclosure or a short-sale you are looking at a minimum 2-year waiting period before eligible again for a VA home loan.
If a home is lost to a foreclosure or a short-sales with a VA home loan than the new VA Loan may have a reduced VA entitlement…this may limit how much you can borrower without making a down payment. Contact the Martini Mortgage Group at Benchmark Mortgage so we can help determine if you are impacted.Kevin Martini
Foreclosure is not the only negative credit event, there is also a short-sale. For those that do not know, a short-sale is when one sells a house less than the balance remaining on the mortgage. In a short-sale the mortgage company must agree to the sale.
One must wait 4-years after a short-sale to secure a Conventional Home Loan or a Conforming Home Loan. To secure a FHA Home Loan you would only have to wait 3-years after a short-sale. With the VA Home Loan the waiting period is 2-years after a short-sale.
Even after a bankruptcy one still make the dream of of buying a home a reality. Now there is a Chapter 7 bankruptcy and there is a Chapter 13 bankruptcy. With a Chapter 7, one can secure a Conventional Home Loan or a Conforming Home Loan just 48-months from the discharge date. With the FHA Home Loan and the VA Home Loan the waiting period is just 24-months. For information on the waiting periods after a Chapter 13 bankruptcy or if you are currently in a Chapter 13 bankruptcy give the Martini Mortgage Group at Benchmark Mortgage a call at (919) 238-4934.
Even if enough time has elapsed since the negative credit event you will still need to qualify financially and have established a history of good credit after the negative credit event.Logan Martini
For more information on if you qualify or what you need to do to qualify, reach out to Logan Martini with the Martini Mortgage Group at Benchmark Mortgage.
Logan Martini | NMLS ID 1591485 | Mortgage Planner | Martini Mortgage Group at Benchmark Mortgage | Ark-La-Tex Financial Services, LLC NMLS ID 2143 | 5650 Six Forks Road, Suite 101 Raleigh, NC 27609 | (919) 238-4934 | www.LoganMartini.com | Logan.Martini@Benchmark.us | Equal Housing Opportunity