By Wanda Norge
Over the past few years, many hard-working people who lost their homes or were forced into bankruptcy due to a layoff or reduction in income have since rebuilt their credit and are able to demonstrate their ability to repay-which is a requirement on mortgages now.
Borrowers that have experienced these derogatory events typically have to endure long “wait” periods before being able to enter into a new loan. This has prevented them from obtaining mortgage financing sooner than they would like.
There are newer loans now that eliminate or reduce the time required since the “derogatory event.” There are requirements for LTV and debt ratios, but they can be more flexible than regular conventional loans since the goal is to help get the financing. Reserves are typically a requirement, but can only require a minimum score of 580, and can be used for loan amounts up to $1 million.
So instead of waiting the regular timeframes to qualify for a loan again it is possible to proceed immediately with a purchase or refinance – including getting cash back.
Mortgage Lates (in the past year)
This allows you to proceed without waiting a full year to show a clean payment history (typically required on most loans). There are reserve and down payment requirements, but gift funds are allowed.
For investors that need financing up to $2 million for purchases or refinances of their properties, there is no limit to the number of investment properties. Delayed financing allows you to purchase with your own cash and do a loan immediately after closing as well.
Eligible income documentation includes restricted stock units, asset qualifying for retired prospects with income from their “nest egg” such as an IRA, 401(k), bond portfolio or severance package, and solutions for self-employed borrowers.
Non-Warrantable Condos And Condotels
These property types can be a challenge. Financing with only 10 percent down with no mortgage insurance is possible for a purchase or refinance.
Note that investment properties and these special properties do require at least two years since the last derogatory event.
Solutions Are Available!
If turned down previously or you just did not think it was possible to proceed, revisit the situation to see what may be possible now.
Note that although these are offered as a 30-year fixed loan if you choose, these loans do not need to be held long term since the interest rates will be a bit higher. They are meant to be “gap” loans with no prepayment penalties to get you back into the home market or help with refinancing of a current home.