Category Archives: Financial Advisor

The Waiting Period After Foreclosure, Bankruptcy, or Short Sale

waiting period chartIf you have lost your home through a foreclosure, short sale or bankruptcy and want to get another mortgage loan, you may be wondering how long you’ll have to wait. Your credit will take a hit after all of these situations, although possibly not as much as you think or for as long as you may think. Nevertheless, it will likely prevent you from getting another mortgage right away. The amount of time you must wait before applying for a new mortgage loan depends on the type of lender and your financial circumstances.

2017 FHA GUIDELINES

  • Bankruptcy – You may apply for a FHA insured loan after your bankruptcy has been discharged for TWO (2) years with a Chapter 7 Bankruptcy.  You may apply for a FHA insured loan after your bankruptcy has been discharged for ONE (1) year with a Chapter 13 Bankruptcy
  • Foreclosure – You may apply for a FHA insured loan THREE (3) years after the sale/deed transfer date.
  • Short Sale / Deed in Lieu – You may apply for a FHA insured loan THREE (3) years after the sale date of your foreclosure. FHA treats a short sale the same as a Foreclosure for now.
  • Credit must be re-established no late payments in past 12-24 months, depending on hardship

Application Date must be after the above waiting period to be eligible for FHA financing after hardship.

2017 VA GUIDELINES

  • Bankruptcy Ch 7 – You may apply for a VA guaranteed loan TWO (2) years after a chapter 7 Bankruptcy
  • Bankruptcy Ch 13 – If you have finished making all payments satisfactorily, the lender may conclude that you have reestablished satisfactory credit.
    • If you have satisfactorily made at least 12 months worth of the payments and the Trustee or the Bankruptcy Judge approves of the new credit, the lender may give favorable consideration.
  • Foreclosure – You may apply for a VA guaranteed loan TWO (2) years after a foreclosure
  • Short Sale / Deed in Lieu – You may apply for a VA guaranteed loan TWO (2) years after a short sale, unless it was a VA loan then restrictions apply
  • Credit must be re-established with a minimum 620 credit score

Application Date must be after the above waiting period to be eligible for VA financing after hardship.

2017 USDA GUIDELINES

  • Bankruptcy – You may apply for a USDA rural loan THREE (3) years after the discharge of a Chapter 7 or 13 Bankruptcy –
  • Foreclosure – You may apply for a USDA rural loan THREE (3) years after a Foreclosure –
  • Short Sale / Deed in Lieu of Foreclosure – If you had big issues the deed in lieu of foreclosure will be viewed as a foreclosure and you would want to wait no less than 3 years if the score is under 640.  Over 640 your UW will make the call but typically not less than one year.
  • UPDATED 12/2014 – Mortgage debt included in Bankruptcy will go by BK discharge date, and subsequent foreclosure, short sale, or deed in lieu of foreclosure will not count as an additional waiting period, as long as you are off title for any defaulted mortgages.
  • Link to 12/1/2014 USDA Guideline – HB-1-3555  Attachment 10-B  See Page 4 of 6

Date of Credit Approval must be after the above waiting period to be eligible for USDA financing after hardship.

2017 CONVENTIONAL (FANNIE MAE) GUIDELINES

  • Bankruptcy – You may apply for a Conventional, Fannie Mae loan after your Chapter 7 bankruptcy has been discharged for FOUR (4) years, TWO (2) years from the discharge of a Chapter 13
  • Foreclosure – You may apply for a Conventional, Fannie Mae loan SEVEN (7) years after the sale date of your foreclosure.  Additional qualifying requirements may apply,
  • Short Sale / Deed in Lieu of Foreclosure –
    • UPDATED – Effective 7/29/2014:  Waiting period for subsequent foreclosure that was included in Bankruptcy is waived.  If mortgage is included in Bankruptcy, waiting period defaults to FOUR (4) from the discharge date.
    • UPDATED – Effective 8/16/2014:  Short Sale or Deed in Lieu of Foreclosure not included in a Bankruptcy has a new Waiting Period of FOUR (4) years from date your name is removed from title.  This replaces the ability to buy in 24 months with 20% down payment and minimum 680 credit score.
    • SEVEN (7) Years above 90% Loan to Value | with less than 10% Down Payment – Subject to Private Mortgage Insurance underwriting guidelines.

Credit must be re-established with a minimum 620 credit score.

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Fannie Mae has reduced waiting periods in cases of extenuating circumstances – The death of a primary wage earner seems to be the only one I have been able to identify up to this point.

Date of Credit Report must be after the above waiting period to be eligible for Conventional financing after hardship.

2017 JUMBO MORTGAGE GUIDELINES

  • Bankruptcy – You may apply for a Jumbo mortgage loan once any chapter of bankruptcy has been discharged for FOUR (4) years, FIVE (5) years if multiple bankruptcy occurs on credit profile.
  • Foreclosure – You may apply for a Jumbo mortgage loan SEVEN (7) years after the sale date of your foreclosure.  Additional qualifying requirements may apply,
  • Short Sale / Deed in Lieu of Foreclosure – You may apply for a Jumbo mortgage loan:
    • SEVEN (7) Years from Short Sale or Deed in Lieu of Foreclosure with Maximum 80% Loan to Value
    • NOTE: There are investors out there that will allow you to buy again in FOUR (4) years after a short sale, but expect higher rates, higher fees, and possibly larger down payment requirement.  Jumbo lenders have not yet loosened up the qualifying guidelines for buying after a hardship.
    • It may make financial sense to consider a portfolio Jumbo lender that offer high rates, so that you can take advantage of today’s market.  Once your short sale is seasoned, refinance into a more favorable, longer term loan.

NOTE:  If hardship is the result of an extenuating circumstance, waiting periods may be reduced.  Contact lender for details.

PREPARING TO BUY AGAIN

You should begin looking at your credit at least six (6) months before you are ready to buy again.

Quite often there are things left over on your credit report that can delay your ability to qualify.

With a little head start and good advice, you can get your credit in line, qualify for financing and buy again in the lowest priced real estate market that California has seen in years and years!

We specialize in these situations so feel free to drop me an email, call or leave a question below.

The Waiting Period Chart

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14 Step Plan to Transform Your Finances

managingmoney

I deal with people and finances on a daily basis. One of the things I have noticed is that very few people are taught how to manage their money. Frequently people admit to being so lost they don’t even know where to begin when it comes to money. I wanted to share a 14 step plan to help you transform your finances and better manage your money. Continue reading 14 Step Plan to Transform Your Finances

Tips For A Smooth Loan Approval

check-markGetting a pre-approval is one step of the mortgage approval process. Having a smooth loan process depends partially on you.  As a potential homeowner you must remain responsible throughout the process. In the end only you can determine your future. Here are some tips to help you stay connected to your end goals.

  • DO continue making your mortgage or rent payments
  • DO stay current on all existing accounts
  • DO keep working at your current employer
  • DO keep your same insurance company
  • DO continue living at your current residence
  • DO call us if you have any questions
  • DON’T make a major purchase (car, boat, fur, jewelry, etc.)
  • DON’T apply for new credit (even if you seem pre-approved)
  • DON’T open a new credit card
  • DON’T transfer any balances from one account to another
  • DON’T deposit money into the bank that you can’t explain
  • DON’T pay off charge offs without a discussion with us first
  • DON’T pay off collections without a discussions with us first
  • DON’T buy any furniture
  • DON’T close any credit card accounts
  • DON’T change bank accounts
  • DON’T max out or over charge on you credit card accounts
  • DON’T consolidate your debt onto 1 or 2 credit cards
  • DON’T take out a new loan
  • DON’T start any home improvement projects
  • DON’T finance any elective medical procedure
  • DON’T open a new cellular phone account
  • DON’T join a new fitness club
  • DON’T pay off any loans or credit cards without discussing it with us

If you encounter a special situation, it is best to mention it to us right

away so we can help you determine the best way to achieve your goals.

How Will Trump Affect The US

(Photo by Steve Sands/FilmMagic)
President Trump (Photo by Steve Sands/FilmMagic)

There are a lot of issues that Mr. Trump will need to address during his presidency.  The key is to understand how will Trump effect the US.

How will Trump and Congress get along?

Republicans have control of the White House, the Senate and the House, but that doesn’t mean he will have an easy time on Capitol Hill. The GOP was badly fractured throughout the primary and general election season, as Trump insulted his way through 17 Republican opponents.

Several big names in the party, including former Florida Gov. Jeb Bush, Ohio Gov. John Kasich, Arizona Sen. John McCain and 2012 nominee Mitt Romney refused to support Trump, and House Speaker Paul Ryan would not campaign with him. Trump will have to build support with his former opponents to push his populist agenda into law.

Continue reading How Will Trump Affect The US

Improving Your Financial Freedom

personal-financeImproving Your Personal  Financial Freedom

Improving your personal finances may seem impossible and being in debt can be a stressful experience. No matter what your circumstance is, if you signed for a loan, you are obligated to pay it back.  If you have a life altering experience like losing a job, getting into an accident, or even if you have increased expenses due to having a child you are still expected to pay.

Sometimes debt can just be an unintended consequence of too much holiday spending.  It can also just be overspending any time of year and just not tracking your purchases.  Many people try to get out of debt, but life slaps them in the face hard enough that they give up. But that doesn’t have to be the case. There are so many people who are getting out of debt every single day in a short period of time.

So if you’re ready to get on a path to financial freedom, it’s important to have a plan for how you’re going to tackle that debt!

Continue reading Improving Your Financial Freedom

Why Your Score May Have Dropped

credit-score-14 Surprising Reasons Why Your Scores Might Have Dropped

By ANNA TRINH

You’re on top of your finances — your payment history is flawless, you keep your utilization below 30 percent and your accounts are in good standing.

However, when you log in to receive your eagerly awaited score update, you see that your score has dropped – even though you can’t think of any negative changes you’ve made.

It can be disheartening to see your score go down when you’ve been working hard to keep your finances in order. So, what’s up? Here are four surprising reasons why your score might’ve changed.

Continue reading Why Your Score May Have Dropped

Detox Your Spending

spend-vs-save-325x222

Summer spending is one of the highest moments of our financial yearly budget.  It is filled with vacations, extra food because the kids are home, daycare expense increases, parties, events and more.

What is a financial cleanse?

A financial cleanse is similar to a diet. After overindulging in too many sweet treats or fast food meals, you might reset your habits by eating healthy and working out. Under a financial cleanse, you work toward replacing some of the spending habits that may have gotten out of hand in the summer with mindful spending and saving. Here are some tips to get started.

Continue reading Detox Your Spending

Tips To Make Your Finances Less Frustrating

man-frustratedHave you had a similarly frustrating experience when paying your bills or managing your finances? As part of National Moment of Frustration Day on Oct. 12, we’re sharing five things you can do to make managing your finances easier.

1. Automate your finances to minimize late payments.

Through auto-pay, you can rest easy knowing that your payments will be automatically charged to your credit card and you can avoid late payments.

2. Put due dates in your calendar.

If you’re like me, if something isn’t in your calendar, it doesn’t exist. I’ve found that putting reminders in my calendar helps me stay on top of my payment due dates, especially for bills that I can’t automate, and paydays.

Consider putting recurring reminders in your calendar (digital or physical) for the following:

  • Your rent is due.
  • Credit card payments are due.
  • When you get paid from your employer.
  • Netflix, internet, gas and electricity bills are due.
  • How about when health insurance, renters insurance and other insurance bills are due.

3. Sign up for text or email reminders.

If you don’t want to manually put reminders into your calendar, you can check with your credit card company, mortgage servicer, auto loan servicer and/or student loan servicer about getting alerts for your due dates.

4. Enroll in credit monitoring.

Your credit score and credit report are important parts of your financial life. But keeping tabs on them may seem inconvenient or time-consuming. One way to make the process less frustrating is to enroll in credit monitoring.

Credit monitoring services can notify you if things on your credit report look suspicious, which could be signs of identity theft. 

Additionally, these services can help you stay on top of your credit scores and reports and have a better understanding of the underlying influences that ultimately affect your credit.

5. Download a savings app to take the legwork out of saving.

If you find it difficult to save, you can download a savings app such as Digit to help you save effortlessly.

Digit looks over your accounts and, through its software, analyzes what you can put in a savings account. It then automatically transfers money from your checking account into a Digit savings account.

Some users love how easy it is to save, while others aren’t impressed by the fact that the savings account doesn’t earn interest.

If you want to earn interest and make saving easier, one option is SmartyPig, an online piggy bank that currently earns 0.75 percent annual percentage yield (APY).

If you’re interested in small-scale investing, you can use an app such as Acorns. Acorns rounds your purchases to the nearest dollar and invests your spare change.

Bottom line

Being an adult, paying bills and managing your money can be frustrating; there’s always one more thing to keep track of or one more bill to pay.

While managing your finances can be a frustrating process, these five tips can make things a bit easier.

Top Strategies to Decrease Debt

Creating A Debt Free Zone
Creating A Debt Free Zone

Doug’s Top Strategies To Decrease Debt

The ideal scenario for people is to start with a fresh slate, decrease debt and still meet your monthly obligations. Defining your needs and wants is a great place to start.  Unfortunately, this isn’t the case for most people.  I know this story too well.

Doug’s Story:  I grew up in a trailer and thought that success was going to be when I had a million dollar house and nice cars.  Through buying real estate and owning a mortgage company I was able to achieve my dream of success.  I bought a million dollar home in St. Charles County that was 8000 square feet.  I had a Lexus and an Escalade.  I bought that dream home at the end of 2005, and the value never went higher, and my income only went down.

Here are some of the top strategies I learned to decrease my debt to regain credit worthiness:

Audio 1: Decrease Debt

Audio 2: Decrease Debt

Continue reading Top Strategies to Decrease Debt

What salary do you need to afford a home in your city?

Salary Needs To Buy A Home In The US
Salary Needs To Buy A Home In The US

by Ryan Smith25 Aug 2016

What salary do you need to afford a home in your city of choice?  

How does your city rate in terms of home affordability? A recent report by HSH.com determined the salary families would need to make in 27 metro areas in order to afford the local median home price.

The study assumed a down payment of 20% and operated under the standard that a monthly mortgage payment shouldn’t exceed 28% of the borrower’s income, according to the Huffington Post.

San Francisco residents need the highest salary if they want to afford a home, according to HSH.com. In the San Francisco metro area, a buyer with a 20% down payment would need to make $162,000 a year to afford payments on a median-priced home.

Pittsburgh, Penn., meanwhile, was most affordable; homebuyers there could meet their mortgage payments with only a $32,400 salary.

HSH.com found that home prices have gone up since the first quarter in every metro area surveyed except for Tampa, Orlando and Miami. Nationally, the median home price was $240,700, about a 10% increase from the first quarter.

Back To School and Salary Needs Audio:

Continue reading What salary do you need to afford a home in your city?