How is Your Credit Affected By A home Loss?

We are in the business of moving, but from time to time we report back the information we find on related fields like real estate. An article posted on Yahoo.com talks about the type of consequences losing your house can have on your credit. The article refers back to a memorandum that the legal department of the California Association of Realtors issued called “Credit After Foreclosure, Bankruptcy or Short Sale.” This document explains how credit is affected after a home loss. A large part of that document is based on Fannie Mae’s guidelines.

Thanks to this online article, The Jacksonville movers found out that five years after a foreclosure, someone may be eligible to get a home loan. With some restriction, obviously, including a 10% down payment and a minimum credit score of 680. However, a second home or an investment home isn’t allowed to own.

Someone may be eligible three years after a foreclosure is ‘extenuating circumstances’ had led to the foreclosure including ‘nonrecurring events that re beyond the borrower’s control resulting in a sudden reduction of income. Also, four years after a deed-in-lieu of foreclosure, a consumer can be eligible for a home loan. With ‘extenuating circumstances’, that’s only two years.

The Jacksonville local movers also learnt that in the case of a short-sale, when the mortgage isn’t being paid, there’s a two-year period that’s applicable. To be eligible, the person must not have delinquencies in the mortgage for at least two months or more during the last year. In this case there’s no ‘extenuating circumstance’ clause.

In the case of a bankruptcy, there’s a four-year period from dismissal date before the person can be eligible for a home loan. For a Chapter 13 bankruptcy, it’s two years.

These tips should give you a general idea about how your credit can be affected in the case of a home loss. However this shouldn’t scare you away from your American dream of owing a home one day. If you have some savings, a steady job and are responsible, owning a home today can be possible. The housing market is not what it used to be because of the economic downturn, however there are plenty of opportunities for cheaper real estate. Buying today might be the right option for you. Talk to a real estate professional and your personal banker to make sure you make the right, informed choice. If you’ll find yourself packing moving boxes in the near future for your residential move, don’t forget to contact your local Jacksonville movers for a stress-free move in the area. We’re experts in all types of moves from apartments to homes, townhouses moves, condo moves, even commercial moves.

Tags: