Boomerang Buyer Essay

There are many ways that “boomerang buyers” can take advantage of the current desirable real estate market. The actions that the “boomerang buyers” take after the foreclosure and leading up to buying another home is very important. Deciding to go “all in” on another mortgage is a challenging decision and the individual needs to make sure that they are financially stable before doing so. This is imperative for these “boomerang buyers” so another foreclosure would not be seen in the future. Being financially responsible is a key factor while attempting to get back into home ownership. Three critical financial factors individuals should consider is their budget, credit score, and debt to income ratio.
When considering home ownership after a foreclosure the first action to take into consideration in an …show more content…
This is a complex step when dealing with past foreclosures. As previously stated, the first action would be to make a plan on paying off old debt. Before being able to buy another home the credit of that individual should be flawless besides the previous foreclosure. Any debt should be paid, and credit card payments should be settled. Any credit cards that are still opened should never have a late payment. This is the main reason for the budget mentioned earlier, so that the individual knows how much can be repaid each month. The reason a good credit score is crucial to the individual is so he/she can get pre-approved for a mortgage.
The last factor to consider when looking to buy another home after a foreclosure is debt-to-income ratio. This is the amount of debt that the individual has compared to their income. This is especially important to consider since these individuals have a foreclosure in their past, they should not get in over their heads. It is important that the individual figures out their debt-to-income ratio so they have the ability to repay the monthly payments on time every