Boomerang Buyers - Bounce Back Into Homeownership Now!
“If you love something, let it go. If it comes back to you, it is yours forever…” While that thought may be a bit of a deep thought for your morning cup of coffee, such is the feeling that many boomerang buyers may get when they think about reentering the real estate market. It may have been years since a boomerang buyer was thrust out of homeownership due to a short sale, foreclosure or other financial hardship. But, with the current buyer-friendly market, now may be the perfect time for boomerang buyers to come back to homeownership forever. If you consider yourself to be a boomerang buyer and even if you didn’t realize you were one, it is only natural that you may have a few concerns, or even fears, about buying another home. Understandably, you don’t want to go through the short sale or foreclosure process again. What you should know is that there is hope for you to return to the realms of homeownership! Here are five ways that boomerang buyers may bounce back into homeownership: 1. Understand it Won’t Happen Overnight When a homeowner goes through the short sale or foreclosure process, they may not even want to think about buying another home for a few years. When it comes to lenders, that may be a good thing. Buyers with these financial dings may be forced to undergo a mandatory waiting period that could be anywhere from three to five or even seven years. Boomerang buyers should note, however, that the short sale and foreclosure financial dings do not last forever. Once the financial processes are completed, mandatory waiting periods can begin. 2. Improve Credit History Once they are ready to reenter the real estate market, boomerang buyers may find that lenders may not be willing to offer them the lowest interest rates. One way to combat higher rates is to begin polishing credit history as soon as possible. Yes, even during that mandatory waiting period. Like any other home buyer, boomerang buyers can boost their credit ratings by establishing a history of paying bills on time. Eliminating debts and lowering overall debt-to-income ratio are good ways to boost credit ratings as well. 3. Obtain Loan Preapproval. Period. Even for buyers with excellent credit, loan preapproval can go a long way. So, boomerang buyers most certainly must bring their lender preapproval letters to the table. Not only will this show sellers that they are capable buyers; but, it also will let real estate agents know that the prospective buyers are serious! To obtain that crucial loan preapproval letter, boomerang buyers will need to prove themselves. They’ll likely have to show lenders proof of their income, assets and debts, which may be something they did not have to do when they sought their first mortgage. 4. Prepare for a Down Payment Speaking of things that boomerang buyers may not have needed in the past; today’s buyers must be prepared with a down payment. Loan preapproval is one thing, but many lenders require a down payment of anywhere from 3.5% to 5% to 20% of a home’s purchase price for final mortgage approval. Since boomerang buyers are typically required to undergo a waiting period after a short sale or foreclosure before they are able to make their next home purchase, they may actually have more time to get their finances in order and save for today’s required down payments. 5. Just Be Honest Many people fall on hard times and no boomerang buyer is alone out there. Lenders and real estate agents work with all kinds of buyers. Possibly, the best way to bounce back into homeownership after facing a short sale, foreclosure or other financial hardship may simply be to be honest about the entire situation. Ask a lender or trusted real estate agent what you can do to put your best foot forward as you prepare to bounce back into the home-buying process! This post is sponsored by PA Preferred Mortgage: Pennsylvania Preferred Mortgage is a full service mortgage banker and is a member of the Prosperity Home Mortgage, LLC family. Specializing in residential and refinance loans, Pennsylvania Preferred Mortgage offers a wide range of mortgage products, including fixed and adjustable rate mortgages, jumbo loans, Federal Housing Administration (FHA) and Veterans Affairs (VA) loans, and renovation financing. Learn more at www.papreferredmortgage.com.
