Wednesday, October 24, 2012

Can You Buy a Fountain Hills Home After Foreclosure?

There's good news for prior homeowners in Arizona who experienced a foreclosure, personal bankruptcy or short sale: you can buy a home again. There is a minimum waiting period, and the amount of time you'll spend in the "penalty box" varies depending on the circumstances.

Here's an outline put together by the Wall Street Journal, with my own two cents thrown in:

If you completed a Chapter 13 bankruptcy, you may be eligible for a new FHA mortgage in as little as 12 to 24 months - as long as your credit history is clean, and you have a suitable income and down payment for qualifying.

If you had an FHA-backed mortgage in the past, and experienced a foreclosure or short sale, you need to wait at least 3 years before being considered for another FHA loan. If you can prove that the previous foreclosure or short sale resulted from events beyond your control, you have better odds of approval.

If your prior mortgage was backed by Freddie Mac or Fannie Mae, and you experienced a short sale or foreclosure, you may be waiting up to 7 years before you are eligible under their guidelines.

In general, short sales, depending on how they were reported by the previous lender, could be treated equal to a foreclosure event. VA and FHA mortgages are the most forgiving when it comes to issuing a new mortgage after a previous short sale, with a wait period of two or three years, respectively.

It's best to leave nothing to chance and obtain a copy of your credit history before beginning your Fountain Hills home search. The key to qualifying rests not only in waiting out the clock, but in improving your credit score to meet current underwriting criteria.

While mortgage underwriting will be stringent, lenders have shown a willingness to reconsider former homeowners who lost their home due to events beyond their control. Over 700,000 former homeowners nationally are now re-eligible for a mortgage. We can expect that the Arizona real estate market will have more than its fair share of returning home buyers.

With the escalating cost of rent, compared to reasonable home prices and low mortgage interest rates, home demand in Fountain Hills and the greater Phoenix-Scottsdale area is expected to increase!

Whether you are a first-time home buyer, or you are a former homeowner returning to the market, you need professional real estate guidance you can trust! As your Accredited Buyer Representative, I have the experience and local knowledge to guide you through our Fountain Hills real estate market. I have helped Arizona home buyers and sellers for over 30 years, and I'd like to help you too!

If you are ready to enjoy the splendor of panoramic, desert views from your own home, let me show you how to get started. Contact me today and find out more about home buying in Fountain Hills!