This past March, Money Magazine claimed that the real estate industry was back. Home Prices had increased in 92 of the country’s largest 100 metropolitan areas, interest rates were in the 3’s and the number of homes for sale was at the lowest level in a decade.
While interest rates have risen more than a point since March, many markets still expect price increases to last well into 2014. As prices increase, the negative equity numbers decrease. More and more people are looking to take advantage of the favorable market conditions and either “trade up” or sell a home they were unable to sell just last year.
In addition, many homeowners who were previously unable to qualify for a mortgage are looking to purchase once again. If you are in the real estate industry, it is time to familiarize yourself below with the term “boomerang buyer” and how soon one can purchase a home following a short sale or foreclosure.
If you didn’t click on the above article, or you simple need a summary, below is a breakdown of the waiting periods for boomerang buyers who are looking to purchase following a short sale or foreclosure:
FORECLOSURE:
-Seven Years for Fannie Mae or Freddie Mac with less than 10% down payment;
-Three Years for a Federal Housing (FHA) loan; and
-One to Two Years for an FHA loan if there were extenuating circumstances (such as illness or death of a wage earner)
SHORT SALE:
-Seven Years for Fannie Mae or Freddie Mac loan with less than 10% down payment;
-Four Years for Fannie Mae or Freddie Mac loan with 10% down payment
-Two Years for Fannie Mae or Freddie Mac loan with 20% down payment;and
-Three Years for an FHA loan.
DEED IN LIEU OF FORECLOSURE:
-Seven Years for Fannie Mae or Freddie Mac with less than 10% down payment;
-Four Years for Fannie Mae or Freddie Mac loan with 10% down payment;
-Two Years for Fannie Mae or Freddie Mac loan with 20% down payment;and
-One to Two Years for an FHA loan if there were extenuating circumstances
Source:Fannie Mae Department of Housing and Urban Development
Conclusion:
Homeowners can now purchase a home following a short sale or foreclosure in as little as 12 months. The majority of these boomerang buyers, however, won’t qualify for financing for two to four years depending on your credit score and down payment amount. The important take away from the new financing requirements is that Boomerang buyers are going to account for a large portion of buyers in the near future. So prevalent, that real estate professionals cannot afford to ignore this segment of the market.
If you are considering a Massachusetts short sale, and would like a free short sale consultation, please call Andrew Coppo at 617-264-0376 to schedule a free short sale consultation.
About the Author: Andrew Coppo of Greater Boston Short Sales, LLC (GBSS) is Massachusetts’ leading short sale negotiator. GBSS assists buyers, sellers, real estate agents and attorneys with getting their short sales closed. Contact us today if you are a homeowner facing foreclosure or a Realtor seeking assistance with a short sale transaction. GBSS is a MARS provider. Please read our disclaimer HERE.
