In the past, borrowers who filed for bankruptcy in New York had to wait four years before applying; now the waiting period will make a mortgage application more manageable and give people the opportunity to get a fresh start on securing their home.
Queens, NY (PRWEB) March 17, 2016
Recent news from federal mortgage backer Fannie Mae announced important changes for those who are trying to get a mortgage after bankruptcy. The mandatory waiting period for those who have gone through bankruptcy, short sale or foreclosure is now just two years. According to a March 11, 2016 article by The Mortgage Reports, “This is one year longer than the FHA's minimum waiting period via the FHA Back to Work program, and a major improvement for conventional mortgage borrowers nationwide.”
Now that individuals can apply or re-apply for a home mortgage sooner, Queens bankruptcy attorney Bruce Feinstein, Esq. is speaking with clients and individuals who have gone through recent foreclosures or bankruptcy hearings. He explains, “In the past, borrowers who filed for bankruptcy in New York had to wait four years before applying; now the waiting period will make a mortgage application more manageable and give people the opportunity to get a fresh start on securing their home.”
Fannie Mae joined the list of loan-related agencies who have similarly loosened their rules on mortgage guidelines. “This offers needed relief to borrowers who have gone through the emotional experience of a bankruptcy or foreclosure, and more applicants can now qualify for loan financing,” says Mr. Feinstein. “While bankruptcy is a sound option for many, it still takes time to strengthen credit afterwards, and the recent recession has been hard on many homeowners since 2008.”
While this news, and the overall trend in the industry, is positive, Mr. Feinstein cautions people to review all their options and budget effectively. It’s important to assess all the potential mortgage rates available, along with mortgage insurance premiums. He says, “Just because Fannie Mae lowered their waiting period does not make them the best option for everyone. People need to review all their lender options and decide whether or not a conventional mortgage is right for them. They also need to look at their post-bankruptcy budget to make sure it’s the right time for them to apply for a home loan.”
Another loan option is the FHA Back to Work Program, which accepts down payments of 3.5% versus Fannie Mae’s typical payment of 5% or more. This may make FHA look more appealing to applicants with less money on hand for a down payment.
The other change that comes with Fannie Mae’s decision is easier ways to become mortgage-qualified. Lower mortgage rates in turn lower an applicant’s monthly payment, and raise their buying power in the market. Overall, these changes to mortgage rules offer a faster turnaround for individuals and families who have gone through bankruptcy, short sale, or foreclosure in New York.
The Law Offices of Bruce Feinstein has nearly two decades of experience in bankruptcy law, helping clients and families resolve their issues and move forward with their lives. Visit bfeinsteinesq.com for more information or call (718) 514-9770 to reach the New York office.