Boomerang Buyer | Propertylogy

Boomerang Buyer

By on June 1, 2019

A boomerang buyer is a former home owner who has been legally forced out of home ownership, and would seek to buy a house again once the waiting period expires.

They have experienced the benefits of having their own homes and prefer to own rather rent. This is why they would re-enter the market when they are able to.

The most common reasons for those who’ve lost their homes in this instance are short sales, foreclosure, and bankruptcy.

Because their past predicament were due to financial reasons, they are required to wait patiently for a waiting period to expire so that they are in the clear to borrow mortgage to buy property again.

In this sense, it is inevitable that boomerang buyers have not wasted the waiting period and spent that time saving up for down payment.

Because of the housing catastrophe in 2008, several homeowners lost their homes in a short period of time.

So they can be a powerful market force when they return to the market at the same time.

Depending on how things played out in the past, a former home owner might have to go through a waiting period of up to 7 years in order to put down less than 10% of purchase price when buying a property.

Boomerang buyers should take note that even though defaults in the past when the house was lost would not affect their credit in new loan applications, they would still have to pass the various criteria of regular mortgage underwriting.

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