June 2016

How Soon Can I Buy a House After a Foreclosure?

In my last article, we discussed how soon you can buy a home after a bankruptcy or short sale, and the standard time frames in which you must wait before re-applying for a home loan. Today we will go over deed-in-lieu of foreclosure and foreclosures, and your waiting periods in their wake. Buying After Deed in Lieu of Foreclosure A Deed-in-Lieu of Foreclosure may happen when a homeowner realizes they aren’t financially stable enough to keep their house, and subsequently offers to deed their property to the lender. If the lender accepts, they in return forgive the homeowner’s debt and waive the right to pursue them for further payments. This situation is rare, but not unheard of. If you find yourself in this way, and would like to apply for a conventional home loan, you will need to wait four to seven years depending on your specific case. You may find…

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How Soon Can I Buy a House After a Bankruptcy or Short sale?

Since the financial crisis of 2007, it seems like everyone knows at least one person who’s pocketbook was hit hard resulting in the loss of their house, or the need to file for bankruptcy. Maybe that person is you. You’ve been through some tough times lately; You’re not alone. Now that you are getting back on your feet, you may be asking yourself, “When can I buy a house again?” Let’s discuss your options for buying a new home after bankruptcy or short sale. Buying a New Home After a Bankruptcy The definition of filing for bankruptcy is the legal proceeding in which an individual is unable to pay their outstanding debts. There are two types of bankruptcy; Chapter 7 and Chapter 13. Chapter 7 bankruptcy occurs when an individual files a petition, their assets are evaluated and used to pay back some of his or her outstanding debt, and…

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Down Payments and Gifts: Part 2

In my last post, Down Payments and Gifts: Part 1, we discussed what a down payment is, how much you might need for a down payment, and how the type of loan determines how you can use a gift. In this post, we will explore the definition of a gift in the world of mortgages, what paperwork you’ll need to verify a gift, and the overall rules for gifts for all loan types. What is considered a “gift”? Let’s say Aunt Judy gives you $50, and Grandma and Grandpa Smith give you $1,000 for your college graduation. Can you use both as gifts towards a down payment on a house? Absolutely! It’s just that the $1,000 probably requires a little documentation. Look at it from a lender’s point of view. When they examine your accounts, they want to be sure that all of the money in there is yours. If…

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Down Payments and Gifts: Part 1

Whether it’s in a jar labeled “Future Home” or in a special account at the bank, you’ve been saving your pennies for a down payment. Go you! But how much do you have versus how much do you need? Are grandma and grandpa giving you a chunk of change for your graduation towards the down payment too? Before answering these questions, let’s take one small step back in order to define some terms. What is a down payment? The definition of a down payment is the initial payment made when something is bought on credit. For our purposes, that something is a house. The money you use for a down payment is the foundation for the equity you’ll build in your home over time as you make mortgage payments. Equity is the total amount of money you’ve paid towards owning your home. For example, if you made a $15,000 down…

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