Why experience matters in mortgages when you buy a house today
This week an agent friend and I will help a family close on their first home in over 3 years. You see they were subject to the economical changes and had to file a chapter 7 bankruptcy and lost a home to foreclosure 3 years ago.
Through the process they came my way in November at a time when mortgage programs were changing daily. They ended up having to wait out the foreclosure until it hit 3 years from the time their deed transferred upon losing the home.
However, in reviewing credit reports of folks who have lost their mark through foreclosure and bankruptcy, you will find one consistency. That is that inaccuracy is the only accuracy you have. You will rarely find that your credit report reflects the bankruptcy filing and updates are done from creditors that were discharged with your bankruptcy.
Now most people know a bankruptcy and foreclosure in combination will cause you to wait 3 years to buy using FHA to get your mortgage. Now if you are using A FNMA loan you are looking at 5 years with the recent changes.
Since my clients were 6 months out we had enough time to comb through their credit report and do the necessary clean up to make sure that the time when the 3 year mark hit for their foreclosure, they were capable to buy.
One important thing is to make sure you have reestablished your credit immediately after the bankruptcy, and DO NOT miss a beat with payments on what credit you do establish. This will ensure that your score is in good standing when you do go to buy a home. Theirs was a 689 (mid) because they had taken out new credit. Don’t be afraid to start over and get back on your feet.
Some of the things I had to do to assist them , was to call out to a country where they lived during the foreclosure and get copies of the release of deed through the foreclosure. I also had to call a county courthouse to show that a few judgements were actually discharged through their bankruptcy as well. Now there were some other miscellaneous repairs we did as well to make sure the credit report was accurate once they were eligible to buy again.
People may ask why I would take time to help them through this, or how much do I charge clients for this credit repair. Quite honestly, when I see someone who has the discipline to overcome a hiccup in their past I will do what it takes to help them own a home again. I don’t charge , but I do ask for referrals so I don’t have to go out and work as hard on my business and can focus on helping them be able to own again.
Not to break my arm off and pat my own back, but most mortgage folks they would have talked to would have told them they had to wait. In fact they did get a second opinion and this person told them they would have to wait until November. Well, considering I am looking at a final settlement statement and it is nowhere near November, I think that was bad advice.
Whether you have had a situation that requires the extra care of what I did for these folks, or you just would like the extra care that should go into buying your home and have great credit, look to the experience right now to make sure you are well taken care of and your interests are kept in mind~