Experiencing a damaging credit event like a foreclosure, short sale, or bankruptcy doesn’t mean you will never be eligible for a mortgage again. So when can you get approved for a mortgage after an unfortunate, derogatory credit event?
While the historical stigma of having to declare bankruptcy or go through foreclosure, for example, has a far less social impact today, these major credit events still carry financial consequences. As a seasoned mortgage banker who has seen far too many who have experienced such events, I’d like to share some good news. They say time heals all wounds, and in the case of major derogatory credit events, this is also true.
Because experiencing a damaging credit event like a foreclosure, short sale or bankruptcy doesn’t mean you will never be eligible for a mortgage again. So, let’s take a look at what mortgage options are available today that help meet the needs of those who have recently experienced the unfortunate.
In mortgage terminology, one important keyword related to this topic is Seasoning.
Seasoning refers to the time lapse required to pass between the “credit event” and being able to apply for a new mortgage. And yes the waiting period. Seasoning varies depending on the type of mortgage.
Here is a quick reference of seasoning time frames for the type of credit issue.
Contributing Writer: Tim Connolly, Lender, NewRez Financial