Wednesday, May 29, 2013
Mortgage FAQs: Buying a House After a Short Sale or Foreclosure? Why So Many Documentation Requirements?
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Our mortgage industry continues to change, evolve and adapt based on years past. That’s why in today’s mortgage update we discuss some of the most important questions that arise in many homebuyers’ and sellers’ minds. Here are the answers as provided by our very own mortgage expert Linda Bertuzzi of Nova Home Loans.
Why do I have to provide so much documentation for my home loan?
Many buyers ask this question and over the years the answer has varied greatly. It started out where home loan files were very thick and they consisted of paper after paper of verifications. Tax returns, income statements, affidavits from previous lenders and landlords, credit reports and so much more. Then for a while things changed. The mortgage industry got very lax and all of a sudden anyone and everyone could walk into a mortgage company or bank and walk out with a home loan.
We all know what the result of that was and following the 2007/2008 housing crisis things changed slowly but very surely. Major banks across the nation had to settle with state and federal regulators and end resulted in very stringent mortgage processes.
What you are experiencing today is part of a collective effort to avoid another mortgage crisis in the future as well as make sure buyers truly can afford what they are borrowing. It’s not just a matter of a house payment; a home loan is a long-term investment that buyers must be able to afford.
How soon after a short sale or foreclosure may I buy another home?
At first after the housing market crashed there were many unknowns as to how long it would take homeowners that were underwater to buy again. But with an effort to streamline the process and help to strengthen the housing industry as a whole, both the Obama Administration and lending institutions came together to be more lenient.
Today, homeowners that were forced to short sale their home can now buy another home as soon as the next day from the sale of their home. This applies in certain cases, and only if the homeowner never defaulted on any payments and remained current throughout the short sale process. On average FHA and VA loans holders can expect to be able to purchase another home within two years of a short sale or foreclosure if credit score is rebuilt and some other requirements have been met.
If you would like to explore your options, we invite you to contact us today! Linda can be reached at 702 596 9565 and is ready to assist in making your real estate goals become a reality!