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We suffered through a foreclosure that sold at auction on May 20, 2011. We have already established that we do not qualify for extenuating circumstances to reduce the Conventional Loan wait time from 7 years.
My wife and I are now in good career positions, between the two of us, our lowest credit score between the "Big 3" is about 755, and most of our scores are in the low 800's.
We are looking for a construction loan for land we own, that we have already installed a well, electricity, and a few other improvements that we have paid cash for.
I am fairly sure that we will qualify for some kind of construction loan when the stupid 7-year "seasoning" time finally expires next year (I hope so, at least).
However, since the 7-year expiration is at the end of May, we want to get started with construction as soon as humanly possible in the summer, so framing, roofing, etc. doesn't extend too far into the time when stuff might start to get snowed on. In other words, we don't want to have to wait for the loan to close and not be able to start anything on the home construction until September or October.
So, here's my question:
Can we apply for the construction loan in, say, March or April to get everything rolling, and then have the loan officer "finalize" everything on May 21, 2018? OR do we have to wait until the very day on the expiration of our 7-year wait to even apply?
Now, I understand that this may vary somewhat depending on the bank issuing the loan, but I am just hoping for some insight.
We suffered through a foreclosure that sold at auction on May 20, 2011. We have already established that we do not qualify for extenuating circumstances to reduce the Conventional Loan wait time from 7 years.
My wife and I are now in good career positions, between the two of us, our lowest credit score between the "Big 3" is about 755, and most of our scores are in the low 800's.
We are looking for a construction loan for land we own, that we have already installed a well, electricity, and a few other improvements that we have paid cash for.
I am fairly sure that we will qualify for some kind of construction loan when the stupid 7-year "seasoning" time finally expires next year (I hope so, at least).
However, since the 7-year expiration is at the end of May, we want to get started with construction as soon as humanly possible in the summer, so framing, roofing, etc. doesn't extend too far into the time when stuff might start to get snowed on. In other words, we don't want to have to wait for the loan to close and not be able to start anything on the home construction until September or October.
So, here's my question:
Can we apply for the construction loan in, say, March or April to get everything rolling, and then have the loan officer "finalize" everything on May 21, 2018? OR do we have to wait until the very day on the expiration of our 7-year wait to even apply?
Now, I understand that this may vary somewhat depending on the bank issuing the loan, but I am just hoping for some insight.
Thanks very much.
The 7 year period is a pretty hard rule. The grey area comes in when the lender determines if they are looking at the foreclosure date to the application date (typically when credit is pulled) OR the closing date.
You may be able to find a lender that bases their determination on the latter and apply in March or April.
Be certain that stipulation is cleared up front since you wouldn't want to go through the whole process, get to closing and have the underwriter back track saying the application date should have been used to meet the guideline.
You could also seek out a lender or credit union that would offer you a portfolio option and FNMA / FHLMC would not apply in full. Based on your statement about good credit and job stability that may be a possible option for you.
Call a lender and explain your situation. If you don't like the answer call another. Get 10 saying the same thing? Then your probably gonna have to wait.
Going through the same for a short sale - 4 years. I was told by multiple lenders that the longest they can keep an application without pulling credit report again is 4 months, and they eoukd still require financials throughout the 4 months, so they recommended starting the application process 3 months before the short sale registration on the comptroller's office - which for us was about 17 days after the official closing.
I am fairly sure that we will qualify for some kind of construction loan when the stupid 7-year "seasoning" time finally expires next year (I hope so, at least).
The best advice I could probably give is suggesting you might re-evaluate whether the 7-year "seasoning" time truly is "stupid", as you say, or whether perhaps you just call it that because you don't see it as working in your favor.
My guess is the banks implement such a policy because it helps protect the both of you and helps to prevent the type of mishap you experienced in 2011 from recurring over and over.
How did you maintain a 755 credit score w/a Foreclosure in 2011?
Koale
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Is it really stupid to make you wait?
