From a mortgage underwriting perspective it’s similar.
A Deed In Lieu is where you beat the mortgage company to the punch… …and give the mortgage company back the house before they have a chance to foreclose.
People ask me how a Deed In Lieu would affect their credit.
I tell them that it would be treated the same way a full foreclosure would – from a mortgage perspective anyway.
…in fact, if you have a “Deed In Lieu” show up in the mortgage history on your credit report – it might as well say “Foreclosure”.
You will have to wait a period of time before you would be eligible for a new mortgage.
…here’s what you’re looking at for seasoning on a foreclosure:
Fannie Mae/Freddie Mac: 7 years. (Sometimes you can get automated approval after 4 years)
VA: 4 years.
FHA: 3 years.
That’s it for today!
I hope you have a great day! Thanks for reading!
Brett
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