Ever heard of Boomerang Buyers? Or Rebound Buyers?
These are the new terms used when referring to previous home buyers who have foreclosed on a home. They are eager buyers patiently riding out their waiting period for when they can qualify again for a home loan.
5 Tips to help Rebound buyers get their finances in order:
- Waiting – The average wait time for qualifying for a new home loan is three years. However, a portfolio loan can be obtained in a shorter wait period, but be prepared these loans usually involve higher interest rates and may be for a shorter, initial term.
- CAIVRS – This U.S. government-run database tracks government-guaranteed loan delinquencies backed by FHA or U.S. Department of Veterans Affairs. If your foreclosure has a CAIVRS claim, you may not be eligible for a new government-backed debt until you’ve repaid the claim. CAIVRS is not publicly accessible so you must consult with an authorized lender to determine whether your foreclosure has a previous claim against it.
- Credit – These scores are as important as ever, maybe even more so. During your imposed wait time, spend the time maintaining good credit and cleaning up bad credit. A foreclosure stays on a credit report for seven years; however, the negative impact fades faster.
- Down Payment – Having a foreclosure on your record means you must put down a down payment. FHA requires a minimum of 3.5% of the purchase price, while other conforming loans without mortgage insurance can run you up to 20% of purchase price.
- Get PreApproved – having previously foreclosed on a home loan, preapproval is a MUST Make sure your lender is taking the necessary step to ensuring you are preapproved to buy a home in San Diego and not just prequalified. There is a difference.
Call Matt at 619-577-4030 for more information on how to help you determine your financial goals and develop a plan of action.