Thinking of buying a home after bankruptcy, foreclosure, or a short sale?

Thinking of buying a home but you have had a previous bankruptcy, foreclosure, or short sale? Over 7 million people lost their homes during the Great Recession. Time has passed and your credit may have improved since then. There are waiting periods for major derogatory credit events to pass, but getting a new mortgage may be closer than you think.

Here are the usual mortgage waiting periods for loan programs:

After the minimum waiting period which can vary depending upon the type of loan program and severity of the credit event, you may be eligible to buy a home again.  Remember, not having a mortgage payment doesn’t mean that you do not need to show proof that you have reestablished credit since the derogatory event.  Re-established credit means paying your bills and rent on time which would of hopefully increased your credit scores.  

 

Extenuating Circumstances

You may have an extenuating circumstance due to a sudden and prolonged reduction in income that was beyond your control.  Maybe you had a catastrophic increase in your financial obligations.   As an example, a serious illness or death of a wage earner may qualify.  Borrowers need to verify that the circumstance was beyond their control such as unemployment, medicals bills not covered by insurance, etc.   Consult with an experienced mortgage consultant to evaluate your situation.  

If you have experienced a foreclosure, bankruptcy or a short sale previously, contact us today to see if you qualify to buy your next home.   Give us a call at 833- START VA or 833-782-7882.

 

 

Written by:  Sherry Huhn  

I can’t tell you how many times I have come across clients that didn’t know that qualifying for a mortgage could be so easy.  Getting qualified for a new home can be a daunting experience for some.   The down payment, credit scores, monthly obligation, the commitment, etc. are things people think of at first.   Not knowing is half the battle when it comes to buying a home.   Here are some of the reasons people don’t look into getting preapproved:

  • Haven’t saved enough for a down payment?

We have the VA Loan with zero down if you are VA eligible.  We also have mortgage options for first time homebuyers for as little at 1% down of the purchase price.

  • What about my credit scores?  

Credit scores can play an important part when qualifying for a home loan.  Each program can require a different.  This is the reason why we evaluate your credit history and determine which program works best for you.  Making the decision is easier once you know your options.  If you don’t qualify today, doesn’t mean that you may not qualify in a few months.  There are ways to improve upon your credit if you happen to have a lower score.

  • Commitment of making a mortgage payment?

I tell people that you are making a commitment to paying rent, right?  Most renters pay a monthly fee to live in their home for a certain amount of money through a certain time frame. If you buy a home you are committed to making a mortgage payment. The commitment was already there. Buying a home is a new commitment that could reap many rewards.

  • How much can I qualify for?

We assist you with the budget that you have in mind.  Once we determine that number we let you know what purchase price range you should be in when shopping for your new home.  A lot of clients like to know what they qualify up to as well.  We give you that purchase price too.  The goal is to help you succeed and get you into a payment that you are comfortable paying and can afford within your lifestyle.

  • Not sure what the future holds?

Whether it’s your first time buying a home or you are buying an investment property, you will want to know how long you think you may be living in the home for.  There are option for homeowners who only plan on keeping their home for less than three years. 

For these people an adjustable rate would work well because it gives them the flexibility to obtain a lower monthly payment for the first three years compared to the traditional 30 Year Fixed.  If you plan on living in the home for over three years, we usually recommend a 30 Year Fixed rate.

Getting preapproved and knowing your mortgage options makes you a knowledgeable buyer which puts you on a successful path to owning your new home. There’s no cost and no obligation to getting on the road to home ownership.

We all have a general idea of what credit is, but not many people actually know what determines it. First, you have to really understand credit. So, what exactly is it? Credit is all based on borrowing money- it is your reputation as a borrower of that money. It determines the ability and amount that you can borrow when applying for a loan. Your credit is all tracked on a report, which is a detailed report of an individual’s credit history. That report is assessed and used by lenders when determining credit worthiness within a loan application.

There are a few main elements that go into a credit report:

  • Account history (how much you’ve borrowed)
  • public records (bankruptcy or foreclosure)
  • inquiries/new lines of credit
  • Payment history (on time or late)
  • Amounts owed/debt

With all of those things combined, your credit report holds your borrowing fate. Whether it is a home loan, auto loan, or credit card, all lenders are going to determin your eligibility through your credit report. One of the most important things contained within the credit report is a computer program generated credit score. It is an algorithm based on your credit report to predict the likely risks of a borrower becoming delinquent on payments made to pay back a loan, and can range anywhere from 580 to 850. There are 3 main credit reporting bureaus: Equifax, Transunion, and Experian. Each of these three scores slightly vary from one another, and a lender will look at the middle number of the three.

 

There are a few myths and rumors surrounding credit scores, here are a few you may have heard:

  1. Checking your credit score will hurt it. FALSE. It is actually good to be aware of your credit score, it should be checked annually. When you are checking your own credit, that is known as a soft inquiry. Those will not affect your credit score and are only seen on personal credit reports. However, a hard inquiry may affect it. A hard inquiry happens when a creditor pulls your credit score because you have applied for a line of credit. These inquiries do not stay on your report forever, they usually only report for 120 days.
  2. You can never improve your credit score. Also FALSE. Negative references such as bankruptcy or foreclosure do not stay on your credit report forever (although they do remain for a couple years). You can always rebuild your credit. Even paying off a credit card balance can slightly increase your credit report. Do this buy paying your bills on time, refraining from maxing out credit cards, working on lowering your debts, and checking your report for errors.
  3. Co-signing means you’re not responsible for the account. Another big FALSE. Whether the account was opened jointly, or one person co-signed, both parties are held legally responsible for the account. Any activity on the account will be shown on both account holders credit profiles. So if one person isn’t making the payments, both see the consequences. The only way to break the dual liability is to either refinance the loan or have the creditor take you off of the account.

 

These are just a couple of the most common myths about credit. It is important to learn what credit is all about so you can make educated decisions when applying for any kind of extension of credit. 

If you have any questions, or would like to share your own credit knowledge, leave a comment and let us know. Give us a call at 833- START VA today!

 

THE VA RENOVATION LOAN

Now You Can Renovate Your Home with the Benefits of VA Lending (Purchase or Refinance)

Are you interested in buying a home that needs some TLC? If so, the VA renovation program could be the solution for you.

The VA Renovation program helps the people who serve our country repair or upgrade their current home, or a home that they plan on buying. The low rates of the VA lending program offers are what makes this renovation program work. It allows for minor renovation costs to be included in the loan amount on a house for purchase, or for repairs being done to an existing home with equity. There is no minimum amount for repairs and you can go up to as much as $35,000 in renovation costs.

Here are the program features:

  • For purchase or refinance
  • Up to $35,000 in renovation costs
  • No minimum repair amount
  • 1-2 Unit Primary residence
  • Cosmetic repairs allowed
  • Includes minor and non-structural repairs
  • No consultant required

Take charge of home improvements with this one of a kind product to create the home of your dreams.

Let us help you get started today!  Call us at 833-START VA or 833-782-7882

To learn more about VA Loans, Click Here.

To see if you qualify for a VA Loan, Click Here.