Monday, March 11, 2013
When Can a Buyer Buy a New Home or Land after Foreclosure or Bankruptcy?
It is not all bad as you think if you have had a Bankruptcy or Foreclosure. We found information that can help those hurt in the recent Real Estate Financial crisis. A period of time needs to elapse and you also need to retain good current credit before you can get back into the real estate market. There are some really short times frames that prior borrowers can take advantage of, Here is the breakdown. Bankruptcy Conforming and High Balance Chapter 7 The time period is four years from discharge date Conforming and High Balance Chapter 13 The time period is two years from discharge date and four years from dismissal date. FHA Standard Chapter 13, 1 year if the payout period under the BK has elapsed and the borrower’s payment performance has been satisfied with all required payments. The borrower may also have to receive written permission from the court before getting another mortgage. A FHA Standard Chapter 7 bankruptcy person will have to wait two years since the date of discharge, and must re-established good credit or no new credit. A borrower with a high balance FHA chapter 7 or 13 will have to wait seven years before entering a new mortgage, while a high balance VA loan borrower with a Chapter 7 or 13 with have to wait two years, or one year but maybe case by case before entering a new mortgage. Pre-Foreclosure or Short Sale A conforming high balance borrower will have to wait four years after the credit report date. The borrower could get up to a 90% LTV (loan to value) also. A standard FHA high balance borrower will have to wait three years while a VA borrow will wait two years. Foreclosure Conforming and High Balance borrows will need to wait seven years from the credit report date while and FHA and VA loan borrower will need to wait three and two years respectively. There you have it. This past foreclosure crisis maybe well behind many prior borrowers and each situation maybe case by case. But with the low interest rates in today’s market there is light at the end of the tunnel.