We’ve All Been There
First and foremost, it is important to remember that just because you had some difficulties in the past, it doesn’t mean you don’t deserve to be a homeowner now. Various employment, health and general economic issues are always at hand and sometimes they become too much to handle. That is why things like short sales and bankruptcy even exist, to help those who have run out of options. And while these are viable solutions to get back on your feet, they typically leave your credit in shambles. Until recently, buying a home one day after short sale, foreclosure or bankruptcy seemed out of the question.
So, What’s Changed?
Some mortgage lenders have seen the writing on the wall and realized that some borrowers deserve a second chance at homeownership. While most of the ‘traditional’ mortgage programs still require you to wait several years after one of these major life events, there are alternative (alt-a) lenders that are willing to look past those negative marks, focusing more on your current financial situation and ability to pay a new mortgage now.
Take a look at the table below; you’ll see the huge difference in waiting periods between the traditional mortgage products and those offered by some of the specialty loan programs at Innovative Mortgage:
|Short Sale/Deed-in-Lieu||Foreclosure||Chapter 7 Bankruptcy||Chapter 13 Bankruptcy|
|FNMA||4 years||7 years from completion date||4 years from discharge or dismissal date||2 years from discharge date; 4 years from dismissal date|
|FHA||Permitted with mortgage history 0x30 for 12 months prior to short sale; 3 years if in default||3 years from completion date||2 years from discharge date||1 year of payout must elapse; buyer must receive permission from court|
|VA||Permitted with mortgage history 0x30 for 12 months prior to short sale; 2 years if in default||2 years per AUS findings with an exception; 3 years from completion date with AUS Refer||2 years from discharge date||1 year of payout must elapse; buyer must receive permission from court|
|USDA||3 years from completion date||3 years from completion date||3 years from discharge date||1 year of payout must elapse; buyer must receive permission from court|
|INNOVATIVE MORTGAGE||1 day after completion date||1 day after completion date||1 day after discharge date with foreclosure completed; 12 months without disclosure||1 day after discharge date; buyout with trustee permission|
It’s Not for Everyone
It’s important to remember that buying a home one day after short sale bankruptcy or foreclosure is not for everyone. They’ll require that you put at least a 20% down payment. If you’ve got that covered, you might find yourself becoming a homeowner much, much sooner than you thought!