Seasoning food makes it taste better. In the home loan area, seasoning can refer to the amount of time you’ve had a mortgage, and it may also be used to refer to adverse financial events. Can you still get a California home loan if you’ve had a bankruptcy, foreclosure, or short sale?
A waiting period after you’ve had an adverse financial event is commonly called “seasoning” by many home mortgage lenders. The longer the period of time after these events, the more “seasoning” you have. Different lenders require different periods of time before they’ll consider a loan application. For example, some lenders may offer products available for people who’ve filed for bankruptcy in the past one, two, or three years. You can find programs for:
- No Seasoning on BK (Bankruptcy)
- No Seasoning on Foreclosure
- No Seasoning on Short Sale
Some mortgages that fit these criteria can be available, but they won’t provide you with the interest rates you’ll see advertised for 30-year fixed-rate mortgages of 3% to 4%. Sometimes you can see mortgages offered for less-than-ideal financial histories referred to as subprime mortgages, but that term has gone out of favor in recent years. You could also see these financial tools called nonprime mortgages, or alternative financing.
You may be able to qualify for a new home loan even if you’ve had a bankruptcy, foreclosure, or short sale. But you should also be aware that the loan will come with a higher interest rate than loans offered to customers with no adverse financial history. You may also be asked to pay a higher down payment.
California home loans are available if you’ve had a financial downturn and experienced bankruptcy, foreclosure, or short sale. While your choices aren’t as varied as those available to people with good credit and no adverse financial events, don’t rule out home ownership for seven years, as some online guides suggest. You can work with an experienced mortgage loan professional who can inform you of loans you may qualify for.
The loan products that had some availability to BK or foreclosure – plus basic terms from this article