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August 25th, 2015 9:22 AM

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Many former homeowners are on a long road back after suffering through a foreclosure or short sale.  But these prospective "boomerang" buyers will soon be ready and eligible to own a home once again.  It takes patience, guidance and the knowledge of the correct procedure to get back on the right track.

  • The waiting period (after a foreclosure or short sale) to purchase another home can be between one to seven years, depending on the type of loan . . . FHA, VA or conventional.
  • The title to the buyer's former property must have been transferred to the new owner or bank.  The more distance in time forward from the title transfer, the more time a prospective homeowner will have to work on developing a good credit file, and the less impact it will have on FICO scores.
  • Two or three credit cards are all that a buyer needs to start developing positive credit.  Keep balances low or pay off each month.
  • A car loan, jewelry store or furniture store offer installment loans.  Keep these loans active; once they are paid off scores will drop slightly.
  • Late payments drop scores substantially.  Prospective buyers should consider auto-pay where your creditors don't see your account number, as opposed to auto-debit where creditors can withdraw money from your accounts and sometimes make errors.
  • Apply for credit sparingly as it also takes points off scores.

It has been seven years since the housing market bubble burst, so many former homeowners should be ready to re-enter the real estate market.  Prices are still affordable and interest rates still low.  Now is the time for "boomerang" buyers.

Posted in:Real Estate
Posted by Allen Doeringer on August 25th, 2015 9:22 AMPost a Comment

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