Boomerang Buyers: Most Qualify for Financing in 2-3 Years

Boomerang Buyers: Most Qualify for Financing in 2-3 Years | MyKCM

According to a new study from Lending Tree, Americans who have filed for bankruptcy may be able to rebuild enough credit to qualify for a home loan in as little as 2-3 years.

This is in stark contrast to the belief that many have that they need to wait 7-10 years for their bankruptcies to clear from their credit reports before attempting to apply for either a mortgage or a personal or auto loan.

The study analyzed over one million loan applications for mortgages, personal, and auto loans and compared borrowers who had a bankruptcy on their credit report vs. those who did not to find out the “Cost of Bankruptcy.”

The study found that 43.2% of Americans who filed bankruptcy were able to repair their credit back to a 640 FICO® Score in less than a year. The percentage of those who achieved a 640 FICO® Score increased to nearly 75% after 5 years. The full breakdown of the findings was used to create the chart below.

Boomerang Buyers: Most Qualify for Financing in 2-3 Years | MyKCM

Americans who were able to repair their credit scores to a range of 720-739 within three years of filing were able to obtain the same financing options as those who had never filed bankruptcy.

According to Ellie Mae’s latest Origination Insights Report, 53.5% of those who were approved for a home loan had FICO® Scores between 600-749 last month. This is great news for Americans who are looking to re-enter the housing market.

Boomerang Buyers: Most Qualify for Financing in 2-3 Years | MyKCM

Raj Patel, Lending Tree’s Director of Credit Restoration & Debt-Related Services had this to say:

“People may think that filing a bankruptcy would put you out of the loan market for seven to ten years, but this study shows that it is possible to rebuild your credit to a good credit quality.”

“LendingTree’s research found that very few bankruptcy filers have a harder time [obtaining a mortgage] than those who have not filed for bankruptcy.”

Bottom Line

If you are one of the millions of Americans who has filed for bankruptcy and think that you have to wait 7-10 years to make your dream of returning to homeownership a reality, let’s get together to find out if you qualify now.

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Equifax Data Breach

You may have heard about Equifax Credit Bureau in the news lately. Equifax is one of the three largest credit reporting agencies in the United States.

Last week they announced that their systems had been compromised several months ago by cyber criminals who may have obtained personal information such as:

  • Name
  • Social security number
  • Address
  • Birth Date
  • Credit card information

Equifax indicated that debit cards were not exposed, so it’s very unlikely that criminals have the ability to withdraw funds from a checking account.

Equifax estimates nearly 143 million consumers may be affected by this data breach.

Check the Equifax website to see if your information could be affected

You can check to see if your information was impacted by visiting the Equifax website.

If it was, you can enroll in complimentary identity theft protection and credit-file-monitoring through Equifax. Please read the details on Equifax’s website to ensure you are aware of the legal conditions of the agreements involved with this monitoring program.

If you are concerned about future data breaches and/or identify theft, we recommend considering the following: www.identitytheft.gov/

The federal government provides resources to help you report and recover from identity theft, please visit www.identitytheft.gov/

Or, you can call the three credit reporting companies directly at:

  • Equifax: 1-800-349-9960
  • Experian: 1-888-397-3742
  • TransUnion: 1-888-909-8872

The information contained herein is not intended to be personal legal advice. Nothing herein should be relied upon as such. The views expressed are for commentary purposes only and do not take into account any individual personal or financial considerations. First Federal Bank of Kansas City may provide hyperlinks to third-party web sites as a convenience, but we do not control third-party web sites and are not responsible for the contents of any linked-to, third-party web sites or any hyperlink in a linked-to web site. First Federal Bank of Kansas City does not endorse, recommend or approve any third-party web site hyperlinked from the Website. First Federal Bank of Kansas City will have no liability to any entity for the content or use of the content available through such hyperlink(s).

Here is the link to the above article on First Federal Bank’s website – http://www.ffbkc.com/financial_success/equifax_data_breach.aspx.

All the best,

Lee McLain

Home Buying 101

Questions about the mortgage process?  Here is a short, quick, easy to read breakdown of the process.  Let me know if you have any questions or concerns and I’ll be happy to answer them.

Home Buying 101 – 5 Steps Guide 6-2017

Thanks for taking the time to stop by, all the best!

Lee McLain