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.
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.
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:
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.
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.
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