Now that the worst of the
foreclosure crisis is in the rearview mirror, former home owners who
lost their homes to a short sale or foreclosure are re-entering the
housing market. They've spent the last few years rebuilding their credit
— and they're ready to buy again.
"We're about three years past the peak of the foreclosures, and
that's about the time when most people would qualify for another loan,"
says Daren Blomquist, spokesman for RealtyTrac. "The market really needs
boomerang buyers to maintain the current recovery."
Some boomerang buyers heading back to the housing market may find
they have to make down payments of at least 20 percent to qualify for a
loan, but others are finding opportunities to put down as little as 3.5
percent or 5 percent.
The wait times for qualifying for a loan can vary depending on the
former home owners' circumstances. Typically, the wait times following a
short sale or foreclosure are as follows:
-
Seven-year wait for home owners with a previous foreclosure before
they can qualify for a new mortgage through mortgage giants Fannie Mae
and Freddie Mac. If the foreclosure was included in a bankruptcy, the
borrower has to wait only four years.
-
Two-year wait for home owners who underwent a short sale before they're eligible for another Freddie Mac and Fannie Mae loan.
-
Three-year wait for home owners seeking a Federal Housing
Administration loan after a foreclosure or short sale. Some home owners
who underwent a foreclosure because of at least a 20 percent cut in
their pay may be able to qualify for a new mortgage after just a year
through FHA's Back to Work program.
Source: "'Boomerang' Buyers Get Another Chance at Homeo