SHORTER WAITING PERIODS In years past, it was pretty rare to have a short sale or foreclosure on your record. Because of that, mortgage lenders weren’t in a big hurry to lend to people that had one of those. They would often make someone wait 5-7 years until they would approve them for a mortgage loan again. This worked out OK for the lenders back then because they could still make all the loans they wanted. Fast forward to when the mortgage meltdown happened and a huge swath of Americans experienced a distressed sale of their home. The market appears to be in a recovery now, and lenders are now much more willing to lend money than they were just a few years ago. But they are finding that many of their potential customers don’t qualify because they are still within the 5-7 year waiting period. I’ve been expecting lenders to start to shorten their waiting periods. A few of them did a year or so again, and now more of them are following suit. There was a recent announcement that one of the major lenders that used to have one of the longest waiting periods is now shortening from 7 years down to 4 years. And there are many other lenders that have dropped their waiting periods to 2 years. I also know of one aggressive lender that has NO waiting period after a foreclosure or short sale. However, that lender only offers adjustable-rate loans for that situation. Most people really want to lock in a fixed rate loan right now. But still it’s nice to know that if you had a distressed sale in the last 5 years, you now have a lot more options to buy a home again sooner than in the recent past.
Posted on: Mon, 22 Dec 2014 17:07:42 +0000