Boomerang buyers refer to homebuyers who purchase another home after their last one was foreclosed or after they have filed for bankruptcy. Many such cases have risen in the years following the recession of 2008, and boomerang buyers are estimated to comprise about a tenth of all U.S. home purchases so far this year.

The speed by which you can get a new loan still depends largely on your financial profile. Additionally, as explained by contributor Chris Birk, it all depends on a loan product’s seasoning or waiting period.

Two Years or Less

VA loans typically carry a two-year seasoning period after a foreclosure. A short sale may not result in a seasoning period for a VA loan or even a conventional loan, depending on the lender. A Chapter 13 may result in a seasoning period of two years for conventional and VA loans. The latter could be shortened to only a year if the borrower can show timely payments for at least 12 months, and obtain a court permission to file for a new debt.

Three Years

A foreclosure can result in a three year waiting period for a new FHA or USDA loan, particularly if you defaulted on another VA, FHA, or USDA loan. As for private loans, this is as short a waiting period a borrower can get after a foreclosure, provided the borrower proves the foreclosure was beyond his control.

Four Years

A bankruptcy or short sale can lead to a seasoning period of four years for a private loan.

Seven Years

Except in cases with extenuating circumstances, foreclosures generally lead to a seasoning period of seven years for a private or conventional loan.

In the event of both bankruptcy and foreclosure, most lenders disregard the latter, provided the debt has been written off in bankruptcy. This means that the waiting period will be based on the type of bankruptcy filed, as well as any extenuating factors that could shorten the period.

As can be seen from all these data, the circumstances involved in getting a new loan for a boomerang purchase can be complicated. Alabama residents will benefit greatly from the services of a skilled Birmingham real estate lawyer who can guide clients in sorting through their various options, given their past and present circumstances.

These figures also show that, in cases of financial difficulties, the right bankruptcy or foreclosure filing is very important for future loan transactions. Given this, the guidance of competent bankruptcy lawyers from reputable Birmingham law firms, like Cloud Willis & Ellis, LLC , is very important in times when financial situations require legal intervention.

(Source: “How Soon Can I Buy a House After Bankruptcy or Foreclosure?”, October 17, 2014)