What is a Boomerang Home Buyer?
Short Sale Homeowners
Home buyers who are coming back to the market after either a foreclosure or short sale are termed “boomerang buyers”. These are people that have owned a home previously and want to own again. Why this term– I don’t know yet it seems that is what the media and others in the real estate industry talking about.
Rising rents and the desire to own again now that the economy is more stable are motivating people to re-enter the market. Also, with the interest rates rising is another incentive to act now.
Generally those folks that decided to go the short sale route may be eligible after 2 years from the time of the sale. Each lender has their own set of rules. Foreclosures may take a bit longer to reapply for a mortgage–as we move forward and the economy and job market get stronger the rules are constantly changing.
The Federal Housing Administration recently announced they are giving some former home owners another shot at home ownership without requiring the standard 3 year waiting period. The FHA sent a letter to mortgage lenders stating that it would offer mortgage insurance to borrowers who once filed for bankruptcy, or who lost their homes through foreclosure or short sale during the recession.
Someone who lost their home just last summer could potentially qualify to buy a home today–of course, certain requirements must be met, i.e credit scores, income and the hardship which caused them to lose their home initially.
Borrowers may have to undergo housing counseling and FHA is requiring lenders to verify that at least a year has passed since the foreclosure or “economic event” that caused the foreclosure or bankruptcy.
“FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage,” according to the letter FHA sent to lenders.
So bottom line – the good news for all those people who lost their homes due to a short sale, foreclosure or bankruptcy have the opportunity to purchase a home.
Filed under: General RE Tips
Like this post? Subscribe to my RSS feed and get loads more!