With the 2008-2012 housing crisis fading into memory, more consumers are finding they might finally be able to try home ownership once again. Boomerang Buyers – folks who lost their homes to foreclosure, short sale or who were more than 60 days behind on their mortgages – are finding that with careful credit management they can qualify for housing loans once more. In Dallas that means approximately 125,000 homeowners could be re-entering the housing market, according to a recent RealtyTrac study.
Who will lend to me? There are several options available for buyers post-foreclosure. Conventional loans typically require a 7-year waiting period after foreclosure, and 2015 marks the end of that window for many impacted at the beginning of the crisis. FHA loans typically require a smaller down payment and only a three year waiting period. Folks eligible for VA loans will find their wait can be as short as two years. If you’re considering re-entering the market, talk to your lender to see if your credit, income, and debt load can support a mortgage.
Watching my credit. According to TransUnion, about 16 million consumers have rebuilt their credit to at least the level where they were before the housing crisis. At least 8 million Americans have left the subprime tier. One of the most important things you can do to prepare for buying a home, whether or not you’ve been through a previous distressed property sale, is to manage your credit wisely. Get a copy of your credit report and see where your score lies. Make sure the information is accurate and don’t take on any additional debt (buying a car, putting charges on a credit card, etc.) while you are in the market for a home. Lenders will want to see that you can keep your debt-to-income ratios in a low enough range that you will be able to afford monthly payments on the mortgage.
Get Ready. It’s important to discuss your housing history with your MetroTex REALTOR before you get too far into the buying process. Your REALTOR can help you determine how much you’ll need to have saved for down payments and for closing costs. Having a frank discussion with your REALTOR will help you get a clear picture of what you can expect from the process, and how the market has changed.
For more information on buying, selling, and leasing property in Texas, visit www.dfwrealestate.com.