The economy has been full steam ahead for the past couple of years and the real estate market is no exception.  In Colorado alone, reports indicate that about 10,000 people are moving here every month. Builders are building homes, condominiums and apartments as fast as they can in order to serve the growing daily demand.

Some of us may recall that Colorado was one of the hardest hit real estate markets during the Great Depression of the 2000s when our state led the country in the number of home foreclosures.  Now we can brag that Colorado has one of the lowest number of foreclosures in the nation.  Not to mention that of the small number of foreclosures that Colorado does have, those homeowners have far more equity than the nation's average foreclosure and can more often repay their lenders without loosing their homes. Read the Denver Metro Association of REALTORS latest market report here.

So it is not surprising to hear from lots of folks, who are asking us, "So...when can I buy again?".  Maybe you have been asking the same question too. If you were directly impacted by the Great Depression and went through the misfortune of loosing your job, loosing yoru home, or even bankruptcy, but find yourself in a stable position financially and professionally, then it is time to find out the answer to this question.

Lenders have a term called "Seasoning". In simple language this term refers to the amount of time that  your cash deposits must sit in your bank account.  The length of time the funds sit without withdrawing is  part of a lender's verification process to help ensure the bank that you (the potential borrowers) are not spending your funds as soon as they are deposited. Below is a table that outlines a lender's recommendations to borrowers who have had some financial issues in the past.

Seasoning Policy for Bankruptcies, Foreclosures & Short Sales

Loan Foreclosure  Bankruptcy  Short Sale

Conventional

 7 years from completion

Ch. 7: 4 to 7 years from discharge/dismiss

Ch.13: 2 years from discharge and 4 years from dismissal

4 years from completion

FHA

3 years from completion date; FHA pays the initial claim and clears CAIVRS

Ch. 7: 2 years from discharge - AUS approval

Ch. 13: 1 year of payment period must have elapsed with satisfactory payment performance  and permission from the court

No seasoning if: Borrower made all mortgage/installment payments within the month due for 12mos. prior to the short sale AND made all mortgage/installment payments within the month due for the 12-mo. period preceding the date of the loan app for new mortgage

3 years seasoning from completion

VA

2 years from foreclosure date

Ch. 7: 2 years from discharge - AUS approval

Ch. 13: 1 year of payment period must have elapsed with satisfactory payment performance  and permission from the court

No seasoning if: Borrower made all mortgage/installment payments within the month due for 12mos. prior to the short sale AND made all mortgage/installment payments within the month due for the 12-mo. period preceding the date of the loan app for new mortgage; 

Jumbo

7 years from completion

7 years from discharge/dismissal

7 years from completion 

Investor

2 years from completion

 2 years from discharge/dismissal

2 years from completion

 

At LRA we would be happy to refer you to lenders who have the experience to help you through the loan process to fully understand what you are eligible to borrow, how much you need to save to put down as a down payment, if you need mortgage insurance or how to best navigate the conditions in the chart pictured above. Feel free to reach me anytime at @cory@louisvillerealtyassociates.com.

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