Month: June 2015

According to the American Bankruptcy Institute, 875,635 Americans filed for bankruptcy in 2014, 11 percent fewer than in the previous year. RealtyTrac data shows 1.12 million foreclosure filings in 2014, an 18 percent drop over 2013. While both declines are good news, the numbers still represent millions of consumers who are now struggling with the negative effects such events have on their credit scores and ability to secure financing for major purchases.

Fortunately, their struggle won’t last forever. Many consumers are able to close on a home loan just a few years after one of these significant financial hiccups.

Buying a Home after a Bankruptcy

Consumers who file for Chapter 7 are typically looking at a wait of four years for a conventional home loan or two years for FHA or VA financing. Different lenders may have their own in-house requirements on top of those established by the loan program.

Consumers who file for Chapter 13 may be able to secure a conventional loan after waiting a mere two years. The wait for a FHA or VA loan is even shorter: after filing Chapter 13, they typically need to show a minimum of 12 consecutive months of on-time payments to creditors.

Buying a Home after a Foreclosure

Whether their lender foreclosed on their home or they opted to use a short sale or deed-in-lieu of foreclosure to unload the property, wait times to secure financing may be longer than for consumers dealing with bankruptcies. Even a loan modification can trigger a “seasoning” period.

Conventional loans—mortgage loans backed by Fannie Mae or Freddie Mac—typically require consumers to wait seven years after the completion of their foreclosure. VA loans have a two-year waiting period.

FHA loans offer a bit more leeway. Through the Federal Housing Authority’s Back to Work Program, consumers may be able to purchase a primary home as little as 12 months after experiencing a foreclosure. However, to qualify, they must be able to prove that the loss of their previous home was due to circumstances beyond their control—namely a job loss or a medical emergency that reduced their income by at least 20 percent for more than six months.

For consumers who are unable to prove they endured this type of economic event, the waiting period for an FHA loan is typically three years.

Rebuilding Your Credit

While FHA and VA loans may have less stringent requirements than conventional mortgages do, anyone wishing to buy a home after the waiting period associated with their financial hiccup is likely to need to spend much of that time rebuilding their credit and saving for a down payment. Both bankruptcy and foreclosure can knock 100 points or more off a consumer’s credit score.

This requires committing to living within one’s means, socking away savings, and making on-time payments on all bills. It’s best not to max out credit cards or take on a lot of new debt in the process. Those who rent after foreclosure may want to look for a landlord who participates in Experian’s RentBureau program. Timely rent payments will then help boost their credit score.

Are you ready to buy or sell a home? Contact us today for real estate or mortgage assistance.

According to researchers at Princeton University, it only takes us 100 milliseconds to form a first impression of another human based on his or her appearance. We can assume potential homebuyers judge our properties just as quickly, basing their initial impression on external appearance—or curb appeal. Not only will improving your home’s curb appeal reduce the time it spends on the market, it may even increase its sales price. And it doesn’t have to cost a fortune to cultivate. Just consider these simple ways to add curb appeal on the cheap.

1. Mow the Lawn – A well-manicured lawn is an easily recognizable sign that you’ve probably maintained your home. Before you put your property on the market, spend a weekend cutting the grass, trimming the bushes, weeding flowerbeds and cleaning up clutter.

2. Scrub the Exterior – Washing dirt off siding is almost as good as giving your home a fresh coat of paint. In many cases, a hose with a spray nozzle is all you’ll need to rinse away dust and grime. If heavy-duty cleaning is required, look into renting a pressure washer. While you’re at it, spray down your walkways and driveway as well.

3. Brighten the Entryway – Repaint your front door, clear away cobwebs, replace your dingy welcome mat with a new, bright one and—for extra points—add a few potted, flowering plants on either side of your home’s entrance.

4. Get Sparkling Windows – Many homebuyers cruise neighborhoods at after dark, driving by available properties. Clean windows not only allow more sunlight into your home during the day, but also help it look its best at night. Wash every window—inside and out.

5. Harness the Power of Flowers and Shrubs – Whether your yard is large or small, colorful beds of flowers can make it instantly appear more luxurious. Shrubs serve as natural fences and can create additional privacy around patios and porches. When choosing plants, make sure you have varieties that bloom in late spring, summer and early fall so your yard will look equally beautiful throughout the season.

6. Freshen up Soil and Mulch. If you want to keep old landscaping looking as good as new, try laying down fresh soil in your flowerbeds and garden. Fresh mulch around trees and walkways can also brighten your property while creating uniformity.

7. Don’t Forget the Little Details. New address numbers, a unique mailbox, modern door hardware, walkway torches, ornamental flowerbed fencing and other small touches can add appealing personality to your home’s exterior. Fountains, birdbaths, sculptures and wind chimes are also nice additions to almost any yard.

Homebuying season is already upon us, but it’s never too late to enhance your property’s curb appeal. Remember: even little updates can make a big impact. And please don’t hesitate to contact us whenever you need real estate or mortgage assistance.