Cheryl Knowlton: Hi everybody. Cheryl Knowlton, Dynamite Productions coming at you with Clay Johnson.
Clay Johnson: Hi guys.
Cheryl Knowlton: Castle and Cooke Mortgage. So today is day two of our week on why should I get pre-approved? And today we’re going to be talking about the first leg in the stool about credit and some of the misperceptions that buyers have.
Clay Johnson: Well, you know we came through the great recession as we called it and a lot of people were affected by that. And so what I’ve learned in today’s world as people come and approach me, they’re kind of harder on their credit than it actually is.
Cheryl Knowlton: They’re hard on themselves aren’t they?
Clay Johnson: They are. They say, “You know, I had a bankruptcy, a foreclosure, a loan modification, you know, some different things.” But these were back in 2008, 2012. Since then, they’ve actually done really well. And so one of the biggest misperceptions is, you know, I have to wait seven years or even ten years after Chapter 7 bankruptcy. The reality is, and you know this, but two years for an FHA loan and the same for a VA loan as well.
And so you can get back in the game very quickly. On a Chapter 13 where they’re repaying some of that debt, you guys can get back into that with one year of good on time payments to your trustee and permission from your trustee. But again, they’re thinking it’s a seven to ten year wait. The same thing on short sales, they can do that after three years on a FHA loan or four years on a conventional loan as well.
Cheryl Knowlton: That is crazy.
Clay Johnson: It is.
Cheryl Knowlton: So helping your buyers get pre-approved and helping them to be educated and recognize they might be able to buy a home a lot sooner than they thought they could, is good news for everybody.
Clay Johnson: Yeah, that’s true. And you know, everybody is different as far as their scores and the one of the biggest things that happened after that, is your rate will be effected by your score a little bit. So what can you do? And sometimes we look at is there some score optimization that can be done there? Most oftentimes there is, to get them a little better rate on the mortgage as well.
Cheryl Knowlton: Score optimization.
Clay Johnson: Yeah, yes.
Cheryl Knowlton: I like that. We might have to talk about that some more. And until then, we’ll see you next time.
Clay Johnson: See you guys.