When Can I Buy A Home After A Short Sale, Foreclosure or a Bankruptcy?

The other day I had someone comment to me that no one really wants to buy a home and no one is really buying, that is not true, they are more like trying to buy but qualifying in today’s world is not the same as it once was.  The latest studies show that 29% of all Americans have credit scores of 580 or below, and in the Santa Maria real estate market that is no exception. The FICO score is one of the first things lenders look at in determining a borrowers qualification for getting a mortgage loan.  Most of my appointments lately have been those that have sufficient income to qualify to purchase a majority of the Santa Maria homes for sale especially with the today’s current interest and with the values that homes are currently at.   The reality is that for the majority of those in Santa Maria or around the surrounding areas the rent of the home that most are living in can be purchased and paying a lower mortgage payment than what they are currently pay for rent.  But the problem is that most of them seem to have low credit scores due to past events.  I have a good majority of my appointments now consist of those that lost their homes 2-3 years ago or those that have had to file bankruptcy for whatever reason 2-3 years ago or more.  But with today’s lending environment banks are not willing to lend money to people with a past history that is still affecting their scores.  In some cases, it is possible for people with bad credit to qualify for a home loan, but it is difficult and the rate is higher. Essentially, this means that nearly one in every three Americans do not have enough good credit to purchase real estate.


If you did lose your home lets say 3 years ago you do qualify for an FHA loan from the date of sale on your home when you lost it and the biggest factor that may be holding you back is your credit.  People seem to forget to check up on their and verify what is being reported.  It may be accurate it may not be the reality is YOU need to know and you do get a free credit report once a year so why not see whats on there and you can even dispute it if it should of been removed because you have already taken care of that particular account.  To see what is being reported on your credit report you can go to www.AnnualCreditReport.com, just a heads up you will need to have some old account numbers handy to verify that you are you .. also keep in mind this is only to see what accounts are on your credit report they will not disclose credit scores those you have to pay for separately for each credit bureau.

Those that lost their homes due to a foreclosure and even those that did a short sale on their homes 3 years ago are not eligible for an FHA loan so that means

3 years ago you lost your home now you can probably buy that same home in that same neighborhood for less than half what you probably owed on it when you lost it.

Although I know for many at the time of losing the home it was pretty dramatic whether you did a foreclosure or a short sale it really doesn’t matter both events are probably something you never thought you would do or that would ever happen to you.  But you were not alone in this and millions of other home owners had to experience the same feelings of failure and disappointment.  But at the same time I am getting some really happy people when they are qualified and buying a home in the area for less than sometimes even as much as 70% of what they owed on their home.  So sometimes one door closes and another door opens, it just takes awhile.

As for Bankruptcy same thing all you need is 3 years so if you were in the position that you felt you had to file for bankruptcy and 3 years have passed you can buy a home as well.   Now if you lost a home 3 years ago and you filed BK 2 years ago you need to wait till the 3yrs. have passed on the BK and its not from the date you filed but from the date it was discharged basically when you were done and over with it .  Which if you filed a chapter 13 might be a little longer of a process but if you filed a chapter 7 could be much sooner.  But you still have to re-establish your credit.  I once had two brothers that filed BK on the same day due to a failed business they had together one brother I had 700 plus fico scores and the other I could not touch.  The difference was that one brother was diligent about re-establishing his credit and building it back up.  I had clients this year that had filed BK and swore to never use credit again which is fine unless you ever want to borrow money.  So when I ran their credit, they had nothing no scores nothing … they had not debt also which is great and lived by the attitude if we have no cash to buy we do not buy it but I could do nothing with them.

Needless to say that for most people what is stopping them is credit not necessarily their income, from buying a home.   Simple solution is just check your credit and address any issues you see there, and if you see something that should be fixed dispute it.  IT IS FREE TO CHECK YOUR CREDIT YOU CAN ONCE A YEAR WWW.ANNUALCREDITREPORT.COM.

For A FREE List Of Foreclosures & Pre Foreclosures On The Central Coast Click HERE

If you have any questions about buying a Santa Maria home for sale in the Santa Maria Real Estate market or any properties on the Central Coastand need to get a loan in Santa Maria, CA or any where in the state of so I California not just on the Central Coast, so I can do California home loans, and first time home buyer loans, as well as refinance home loans and just plain simple mortgage loans. So please contact me by sending me an email at: GenePerez@GMSLoans.net

I do also service all the nearby communities and other markets such as the Santa Ynez real estate market, Nipomo Real estate market, Arroyo Grande real estate market, Grover Beach Real Estate Market, and all other surrounding areas regarding the homes on the Central Coast.

my goal is to provide you with resources you need. I can also help in getting the financing for your home. If you have any suggestions or questions in how I can provide more or better

information please let me know. I have been helping my clients for the last 15 years on the Central Coast, Gene Perez – 805-448-7101 , DRE 01321588

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Important Disclaimer: Questions and answers provided on this website and by Gene Perez is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice.

Gene Perez is Licensed Real Estate Broker for Valley Hills Realty and a mortgage broker for Greater Mortgage Solutions.

This blog and its content is copyright of Gene Perez 2010. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge Gene Perez as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining Gene Perez’s


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