Boomerang buyers — homeowners who have gone through a foreclosure, short sale or bankruptcy — are returning to the market in high numbers. According to John Burns, a national research firm for the housing industry, one in 10 homebuyers today have been through a foreclosure or short sale.
Locally, Edina Realty agent Chris Fellerman confirms that 10 – 15 percent of his client base has previously undergone a serious financial hardship, including foreclosure. “It’s a vibrant sector of the market today,” says Fellerman.
Getting back in the game
To qualify for an FHA mortgage, you’ll have to wait three years after a foreclosure or short sale. The wait can be shorter if your default was out of your control due to lack of employment, health issues or something similar. For conventional financing, you’ll have to wait four years with some wiggle room for the same extenuating circumstances.
Credit score is still critical
A high credit score is still the magic number for securing loan financing, so those who have defaulted on a loan will need to work hard to increase their score.
Still, lenders approve loans on an individual basis so even with the ding of a foreclosure or short sale on their record, hopeful buyers can prove themselves in other ways.
For more information on securing a loan after a financial hardship, reach out today. We’ll put you in touch with one of our Edina Realty home mortgage consultants, who always keep your information secure and confidential.