If you’ve lost your home to foreclosure, you may be wary about buying again and you’re not alone. The good news is, buying a home after a foreclosure is possible! It always pays to find out the facts about applying and exploring your options. Here’s three steps you can take to get started with your next home purchase.

Finish the waiting period

Applying after foreclosure

After you have completed a foreclosure, there is a mandatory waiting period before you can apply for a mortgage again based on the financing you are looking for. Depending on your previous loan and lender, this waiting period can be anywhere from two to seven years. This waiting period exists because that’s often how long it takes for the foreclosure to be removed from your credit report. This can also give you time to improve your credit.

There are times when a foreclosure waiting period can be shorted or waived, such as foreclosure due to extenuating circumstances. If that is the case, it can’t hurt to reach out to a lender to see if you qualify.

Improve your credit

If you had a great credit score before foreclosure and have worked hard to get it back up, great! Lenders love to see that you have been financially responsible and doing your due diligence in cleaning up your credit report. If you’re still not quite there, here’s a few ways you can improve your credit after a foreclosure:

  • Paying all debts on time, every time
  • Not taking on more debt through large purchases like a car
  • Getting a secured credit card and using it responsibly

If you rent, you can go to your landlord and ask for documentation that you have faithfully paid your rent. You can then use these documents to show your lender when applying for a loan. Some property management companies will report rental payments through services like Experian RentBureau while others don’t.

Get pre-approved by a lender

As with all loans, you’ll need to apply and get pre-approved for your next mortgage after a foreclosure. Pre-approval will show that you have a lender supporting you and help you manage your expectations on what you can afford.

Need help applying for a mortgage after a foreclosure? The trusted experts at SmartMortgage have years of experience helping buyers like you find the right solution to get back into the housing market.

Get pre-approved before starting your home search

Contact us at SmartMortgage to get started today

The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.