2016 Conventional Loan Guidelines for loans processed after a deed-in-lieu of foreclosure or a short-sale requires a mandatory 4 year waiting period after the deed-in-lieu or short sale. For those that don’t know, a deed-in-lieu of foreclosure is an alternative to a foreclosure where you are allowed to voluntarily hand over the keys to your house so to speak. Normally you have this arrangement agreed to by the bank, if not, you will end up in a standard foreclosure as approval of this is key. Getting the bank to agree to this will save 3 years from your waiting period as a foreclosure requires a 7 year waiting period according to 2016 Conventional Loan Guidelines. The other situation which may pose an issue with your waiting period is when you as the borrower finally come off the deed to the property as until that day occurs, the waiting period does not start.
Short Sales are treated the same way in terms of 2016 Conventional Loan Guidelines in the fact they need a 4 year waiting period to occur before you will be approved to purchase a home again. For short sales, the waiting period starts from the date of the short sale which is shown on the HUD Settlement Statement. Up until 2014 You could get a conventional loan 2 years after a deed-in-lieu or short sale, but this is not the case any more these days.
As mentioned earlier, according to 2016 Conventional Loan Guidelines, there is a 7 year waiting period after a foreclosure before you can obtain another conventional loan. The waiting period starts once the deed is transferred out of the borrower’s name. In theory, you can be out of your house for months or a year but until the deed is updated the clock hasn’t started.
With regards to bankruptcy Chapter 7 and Chapter 13 are treated different with regards to the waiting period needed before you can get a conventional loan again. If you have gone through a Chapter 7 bankruptcy, the waiting period is 4 years from the discharge date of the Chapter 7 bankruptcy. On the other hand, there is only a 2 year waiting period after a Chapter 13 bankruptcy and the clock starts after the discharge date of the bankruptcy.
According to 2016 Conventional Loan Guidelines here is a quick reference guide to the minimum down payment requirements:
– Primary Home Purchase: 5% down payment
– 2-Unit Property: 15% down payment
– 3-4-Unit Property: 25% down payment
– 2nd Home Purchase: 10% down payment
– Investment Property: 15% down payment
2016 Conventional Loan Guidelines require a minimum FICO score of 620 in order to be considered for a loan. With the 620 FICO score you will need to ensure that you can put 5% down towards the purchase of your home. Be aware that with a 5% down payment you will be required to pay PMI (private mortgage insurance) until your loan-to-value is 80% or less.
If you are getting overwhelmed with all the 2016 Conventional Loan Guidelines, you need to ensure you have an experienced professional on your side to guide you through the home buying process. I will work with you to make sure you get the best loan possible and make the home buying experience effortless. Call me any time 24-7 at 888-900-1020, email me at email@example.com, or inquire and Activate Your Loan at www.loanconsultants.org.