What’s a Boomerang Buyer?
The term boomerang buyer is hot term in real estate circles. It’s the buyer who lost a home to foreclosure, but is now ready to enter the housing market again. This type of buyer is making a market comeback. In the first half of 2015, 22 percent of all FHA loans we those of boomerang or rebound buyers, up from 19 percent in the first six months of 2014.
And the future looks bright for this group as well. Over the next eight years, more than 7 million Americans who lost a home in a foreclosure will be credit worthy again.
Bankrate.com offers some tips for boomerang buyers.
- Wait the required period. FHA requires a three-year wait to obtain a new FHA loan. Other lenders follow that, or an even longer, wait period. Remember the clock doesn’t start until the foreclosure is complete.
- Fix your credit. Use the waiting period to pay off and settle old accounts and establish a new on-time payment history.
- Be down payment ready. Make sure you have between 3.5 and 20 percent ready for a down payment.
- Get pre-approved. This will prove to would-be lenders and you have been vetted and are ready.
Sources: RealtyTrac, Bankrate.com, Money