“Boomerang buyers”— former home owners who have gone through a short sale, foreclosure, or bankruptcy in the past few years are coming back. They have exceeded their waiting periods to buy again and in the meantime have saved down payments as well as repaired their credit.
According to RealtyTrac Since the housing bubble burst, 4.8 million borrowers have lost their homes to foreclosure, and another 2.2 million gave them up in short sales,. The good news is a growing number of buyers have rebuilt their credit and are looking to buy again.
Past homeowners typically have a homeownership mentality. They think and feel like home owners and want a place to call their own. They don’t like paying rent and miss being able to claim the mortgage interest deduction on their taxes. Therefore, many are jumping back in the real estate market as soon as they can qualify.
It can take 3 to 7 years for your credit score to recover after a foreclosure or bankruptcy.
If defaulters show that extenuating circumstances caused the foreclosure -- such as a health issue that prevented them from working, a layoff or other one-time event -- the waiting period may be reduced.
The Federal Housing Administration has recently announced in Mortgagee letter
2013-16 they are loosening the wait times for borrowers to buy again with extenuating circumstances to 12 months! For more information on the FHA Back to Work- Economic Event announcement, click here.
Rising rent prices, and the strong desire to own once again now that the economy is growing, are prompting these boomerang buyers back into the market.
If you or someone you know is looking to “boomerang buy” and are ready to get back into the market we are here to help!
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