According to a research by the National Association of Realtors, former owners who underwent foreclosure during the great recession are considering buying a home for the second time. These return buyers are gradually coming back to the real estate market for a second chance at home ownership after spending the time to rebuild their credit.
Industry experts believe that despite ending in foreclosure, the primary reasons why these former owners are returning to the real estate market include easily building equity over a long-term period through home ownership as well as the social benefits of being homeowners, which include belonging in a strong community.
If you are among these former owners considering becoming homeowners for the second time,
Here are some tips to help you in buying a home.
- Spend time to clean up your credit–Similar to first-time homeowners, it is important for former owners to carefully assess their finances and make sure they have clean credit before looking for a house to buy. In fact, it is more important for former homeowners who have gone through foreclosure, which can negatively impact their credit report for as much as seven years.
How the previous foreclosure will affect your credit report will depend on which financing institution will fund your current mortgage loan. On the other hand, there are financial institutions that look at your current credit report and your credit history to assess whether or not you are ready for another home mortgage loan.
- Secure a pre-approved mortgage loan– Once you have ensured a clean and impressive credit report, you will want to secure a mortgage loan before the entire process of buying a home begins. Many real estate professionals agree that this is the first step in the home buying process. This will help you gain an edge over other potential buyers. Plus, knowing how much money you have for the purchase will help you easily find a house to buy.
- Prepare your down payment– This may be a new step for second-time buyers since down payments were not necessary several years ago when they first purchased a house. Today, things have changed and down payments have become an important aspect of the home buying process. If before you were required to pay little to no down payment, now you will need to pay at least 3.5 percent of the purchase price for the down payment if you were approved for an FHA loan. If you have a conforming loan without mortgage insurance, you will need to prepare at least 20 percent of the purchase price for the down payment.
- Work with a licensed and experienced real estate agent– A real estate agent in Myrtle Beach will help you access necessary information and other important resources that will help you gain an edge over other buyers – including first time buyers – in the industry. Many real estate agents believe return buyers deserve another chance at becoming homeowners because they already know and have gone through the challenges of home ownership.
Give Full Potential Real Estate, LLC a call today to speak with a real estate agent about your second chance in buying a home.
Full Potential Real Estate, LLC
Myrtle Beach, SC 29577