What are the derogatory Credit Waiting Periods for Conventional Loans?
There are many people who had financial difficulties at the downturn of the Market. Now they are starting to get back on their feet and they are not sure and would like to know how long they have to wait until the derogatory credit comes off their credit history and start reaping the benefits of a better credit rating which in turn translates to getting a loan at the better rates.
Some people have had legitimate issues why they faced Bankruptcy or a Short Sale and some had just received bad advice and thought these actions would save them from financial ruin in the short term. Never the less now they are in a better place financially.
Just on a side note, sadly, not all individual home owners were properly briefed on what the ramification of their action would translate to financially in the long term. I had a client who was being advised about Short Sales, needless to say I talked him out of it, because he would not be able to buy something again in the same area for what I originally sold him the house for. He in turn was grateful for my advice and now his home is worth twice what he paid for and is able to handle his financial obligations.
Now with that said let’s look at the Waiting Periods for Conventional Loans:
Bankruptcy Chapter 7 = This one is a bit confusing 2 years from Bankruptcy Discharge date with extenuating circumstances. The borrower must have re-established credit history. On the other hand, 4 years from Bankruptcy Discharge date if there are no extenuating circumstances and the borrower must have re-established credit history.
Bankruptcy Chapter 13 = 1 year from Bankruptcy date with extenuating circumstances. Borrower must have a re-established credit history. Lender must include Bankruptcy payback payments into the Debt Rations and the borrower must obtain court approval prior to entering into a purchase contract.
Foreclosure = 3 years from Foreclosure date in which title was transferred back to the Lien Holder with extenuating circumstances. 7 years from Foreclosure date in which title was transferred back to the Lien Holder and of course in both circumstances the borrower must have re-established credit history.
If you are considering buying or selling a home, a luxury home, luxury investment real estate, luxury vacation homes, or luxury beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Marina Del Rey, Venice or Malibu, feel free to contact me at310.486.1002 (m) or homes@endrebarath.com or visit one of my websites at http://www.endrebarath.com. I am a Pet Friendly Realtor and I contribute a portion of my commission to local animal rescue organizations.
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