Boomerang Buyer Wait Times, Credit Re-scoring.
Many homeowners with past credit problems are re-entering the home buying market. With just a few tips, you can help speed up their credit recovery process, earn a commission check and valuable referrals.
The main gist of this posting is how to re-establish scores in time to meet those timelines.
First: Unlike in the previous years, “filing BK” in NOT the “end of the world”. The wait times (to get a mortgage) for a borrower who has a previous BK is essentially 2 years (FHA) and 4 years (conventional).
Related Post: The Fico Myths are Killing Your Credit Scores
The main gist of this posting is how to re-establish scores in time to meet those timelines.
Buyer’s should begin the credit recovery process literally the day after their BK is “discharged” by the court trustee.
Many buyers get a jump-start the process by “reaffirming” (agreeing to paying) debt within the BK process. Most often these are secured debts such as a car loan, student loans and a current mortgage.
These buyers Fico scores will recover faster as they maintain a “on time” consistent payment history.
A half-dozen times in my 35+ year career I’ve had clients declare BK with a perfect credit history. They deduced their situation was hopeless, reached their credit limits and strategically declared BK (while re-affirming a handful of credit lines).
Ironically enough their scores were only impacted 50-60 points, their scores were back to pre BK scores in 12-18 months.
Once a BK is discharged, it is absolutely critical borrowers have ZERO “lates ” until their (future) mortgage funds. Even just one 30 day late after BK can cause an underwriter to decline a loan based on their discretion.
The minimum time for a clean credit history is 6-12 months with 2-3 credit (trade-line) accounts.
For those clients are starting completely over:
The quickest method is to apply for “secured cards”. Buyers should absolutely avoid applying for unsecured cards as their chances of being approved are less than 10% and credit inquiries will drive (post BK) scores “EVEN LOWER”.
Click here for: The 5 Best Secured Credit Cards
The quickest way for a client to begin to the credit rehabilitation process is to access a mortgage credit report (free reports are worthless). I offer a service $50 (per borrower) which is refundable whenever they close a future escrow.
Never Lose a Sale Again Due to Loan Contingencies
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Before Your Buyers Begin Looking for a Home!
Daniel Dobbs (.org)
Managing Broker
Mutual Home Mortgage
265 S. Randolph #120
Brea, Ca. 92821
Cell: 949 250-3981
Dandobbs6@gmail.com
BRE # 00986886 …..NMLS# 307631
Copywrite © August, 2018 Daniel Dobbs MHM Mortgage /// All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed “Attention: Daniel Dobbs, Author- VP-Broker Mutual Home Mortgage 265 S. Randolph #120 Brea, Ca. 92821 Cell: 949 250-3981 Dandobbs6@gmail.com NMLS #307631 BRE #00986886