A "boomerang buyer" is defined as someone who has lost their home in the last five years and is now ready to "come back" to the purchase market. According to Les Christie from CNN Money this demographic is made up of nearly 6 million people. There are a few basic things a boomerang buyer must know BEFORE applying for a loan.
First, know your status. In many cases people stopped making payments on their mortgage only to find out down the road that it was never fully foreclosed, creating what has been dubbed a "phantom foreclosure". You need to know when the title of the property was transferred out of your name and into the lenders name.
Second, if you filed bankruptcy and it included a property, your discharge date is probably not the date you were taken off title. Many people try to purchase a home after a bankruptcy only to find the lien on their home was released several months after the discharge date.
According to Fannie Mae and Federal FHA guidelines, the time period until eligibility begins at the date of title transfer.
Once you have this information get your ducks in a row. To get a realistic idea of what they qualify for, consumers need to have all the necessary documentation. This includes recent pay stubs, bank statements, and tax returns. These are used to figure out the total loan amount.
During the pre-approval process a loan professional can help identify any issues with a previous foreclosure, short sale, or bankruptcy to ensure a smooth purchase transaction.
If you or someone you know are ready to get back into the housing market we are here to help! You can contact me either via email at firstname.lastname@example.org or directly at 510.282.5456.