Posted on: 04th Oct, 2007 06:16pm
If you've been in foreclosure, your credit must have trashed down and this is what will stop you from buying a home or qualifying for a new mortgage after foreclosure. You'll have to organize your finances and get financially stronger prior to getting a home loan again.
You can try getting a loan 1 year after foreclosure but chances are you'll be charged with very high rates. The best thing is to wait for at least 2-4 years to get the better and lower rates on your new loan. Even if you'd like to get a mortgage after 2 years, you can try out with FHA loans but you need to have minimum score of 580-600 especially in times of mortgage and housing crisis.
You can try getting a loan 1 year after foreclosure but chances are you'll be charged with very high rates. The best thing is to wait for at least 2-4 years to get the better and lower rates on your new loan. Even if you'd like to get a mortgage after 2 years, you can try out with FHA loans but you need to have minimum score of 580-600 especially in times of mortgage and housing crisis.
5 Tips to qualify for Mortgage after Foreclosure
Here are 5 Do's to help you get a home loan after foreclosure.
Once you've been in foreclosure, what the new lender will check is how your credit has been used since the financial hardship that led to foreclosure, and how much you'll be able to put down on the new house. In fact, banks may not lend more than 75-80% of the home purchase price to anyone having gone through foreclosure in the past 2 years or so. So, it's important that you have a savings plan and adequate cash reserves.
- Rebuild your credit:
Getting mortgage months after foreclosure may not be impossible but you should be prepared to accept higher rates of interest. For eg: you may be paying 8.20% rate with 2 points for 30 year fixed rate loan while anyone having good credit and not being in a recent foreclosure may get a 6.20% rate with 0 points. So, what you need doing is to rebuild your credit before you apply again.
The best thing is to make on-time payments on bills, credit cards etc. If possible, negotiate to lower the interest rate on your credit cards as that will help you save more. Also check your credit report for any inaccurate information being reported to the bureaus.
You may open new credit accounts but maintain regular payments - this is what lenders will be concerned about when you look out for a new mortgage. Know more... - Save for down payment:
To get the best loan program, you'll have to put down 15-20% of the home purchase price as the down payment. The more you put down, the less you need to borrow and the less you need to pay. - Prepare a budget:
Make sure that you plan a budget and spend according to it. A budget will help you maximize your savings. Use the Simple budgeting tool to plan your budget on a monthly basis. When you start budgeting, try saving some cash in an emergency fund as cash reserves help in qualifying for a mortgage loan. - Check your affordability:
Go for a house that is affordable. Also, calculate the monthly payments (including property taxes and insurance premiums) on your new loan and see if it's well within your reach. Use the Home Affordability Calculator to find out how much you can afford. - Check the housing market:
Even though you may save enough and rebuild you credit, it's important to check the housing market in your area. If you're in a declining market, be careful when you buy. Chances are, if you default, you may be unable to retrieve the loan balance by selling off your home as a result of declining home prices.
At times, certain lenders inflate appraisals and offer more money than the buyer is supposed to get. Make sure that you don't get an inflated appraisal or else you'll be paying more than you should. And later on you may not be able to repay thereby ending up in foreclosure.
Once you've been in foreclosure, what the new lender will check is how your credit has been used since the financial hardship that led to foreclosure, and how much you'll be able to put down on the new house. In fact, banks may not lend more than 75-80% of the home purchase price to anyone having gone through foreclosure in the past 2 years or so. So, it's important that you have a savings plan and adequate cash reserves.
How difficult is it to get another home mortgage after a foreclosure? Also van anybody tell me how to qualify for mortgage after foreclosure?
I had a foreclosure last year and I am trying to find a lender so that I can buy a place to live in besides renting. I have good credit i am never late on any of my payments. Unfortunaley i got scam by a fake loan officer who was doing my loan modification and he took my money to do the loan modification but what was worst i lost my house since he never process any of the paperwork to the lender. I am currently work with the District Attorney in my area to go after these people, but in the mean time i would really like to get a loan to buy a small house. Tired of renting and renters... :cry:
j.m. you're going to have a difficult time of it, even if you have copious documentation that you were scammed. i don't disbelieve you, but the burden of proof is going to be quite high, i'm sure, when you approach a new lender seeking a new mortgage. every mortgage lender has become more conservative in the recent past, and even with documentation, it's most difficult to persuade one to grant a loan when you've got a foreclosure in your past - especially the recent past.
one other option is to consider an owner-financed situation, but that's tough ground to tread too...you need to be ultra-careful that you know who the person is, what he/she is about, etc.
i suppose if you can provide all sorts of rational proof of your circumstance, that a lender might take a flyer on you. and, of course, there's only one way to figure that out...go find a lender in your area and run this scenario by him/her.
one other option is to consider an owner-financed situation, but that's tough ground to tread too...you need to be ultra-careful that you know who the person is, what he/she is about, etc.
i suppose if you can provide all sorts of rational proof of your circumstance, that a lender might take a flyer on you. and, of course, there's only one way to figure that out...go find a lender in your area and run this scenario by him/her.
i lost my house 2 years ago
i had just lost a member of my family and i didnt pay it for months
can i still get another mortgage
i had just lost a member of my family and i didnt pay it for months
can i still get another mortgage
Hi ! My husband and I have very good FICO score both over 850 right now , never late on any payments . But my husband got a new job in other state and we have to move . We have 4 months to sell the house . We owe on our mortgage 350 000 but value of the house is maybe 275000.Prices went down here a lot. What can we do that we don't damage our FICO score that much ? When can we buy another house in future ? Thank u for your help . :lol:
Welcome Sophia,
You can list the property in the market and check out if you can get a buyer for your property. You can apply for a deed in lieu of foreclosure in order to get rid of the property. This will lower your credit score by 250 points and you won't be liable for the deficient balance resulting from the sale. You will have to wait for 3-4 years after a deed in lieu, in order to get a mortgage.
You can list the property in the market and check out if you can get a buyer for your property. You can apply for a deed in lieu of foreclosure in order to get rid of the property. This will lower your credit score by 250 points and you won't be liable for the deficient balance resulting from the sale. You will have to wait for 3-4 years after a deed in lieu, in order to get a mortgage.
if structural problems are fixed, home will not be worth anywhere near what we have in the house. Contemplating forclosure because of it. would it be possible to be let out of the current loan we have now, or would we be able to get another loan on a different house should we foreclose?
Hi Guest!
Welcome to forums!
Immediately after a foreclosure, you won't be able to get a mortgage. You'll have to wait for 3-4 years in order to get qualified for a loan.
Sussane
Welcome to forums!
Immediately after a foreclosure, you won't be able to get a mortgage. You'll have to wait for 3-4 years in order to get qualified for a loan.
Sussane
i had a foreclosure over two years ago on a time share when i was unable to work due to illness now on disability in all this credit score dropped have reestablished credit scoes are 612 609 544 can i obtain a mortgage now
your scores are too low for virtually all lenders at this time. 620 is the essential threshhold now. there is a pocket of lenders which is lending to those with scores such as yours, but they're not exactly easy to find. if you stay on this forum for a while, you may encounter offers from such lenders; otherwise, you may wish to do an internet search of your own to determine who might deal in that market. be prepared to pay more for your mortgage than what is considered "market" rates these days.
We have a old house that my husband paid very little for and he refinaced after a few years because he needed money to fix the house up, they gave him an adjustable rate now we're paying $1100 a month and we can bearly afford it.Now it has been 10years and we have about $15,000 in repairs to do to the house.We can't afford the repairs and in the last 10 years we seen 2 people get killed a couple houses down from us and we hear gun shots all the time the neighborhood has really went down hill and i'm scared for my family while we were having a roof repaired they found bullets stuck in the roof. we have tried for the loan modifacation but they pretty much want us to pay almost the same thing.Is there anything that i can do please help?We want to get out of this neighbor hood what are our options?
hi ishatony,
as you want to get rid of the property, you can apply for a deed in lieu of foreclosure with your lender. if the lender accepts your request, then you would be able to sell off the property and won't be liable for the deficient balance resulting from the sale. however, your score would go down by 250 points.
thanks
as you want to get rid of the property, you can apply for a deed in lieu of foreclosure with your lender. if the lender accepts your request, then you would be able to sell off the property and won't be liable for the deficient balance resulting from the sale. however, your score would go down by 250 points.
thanks
filed chapter 7 -jan.2007 and foreclosure-house sold by bank-aug.2008-have rented since april 2007-never late on any payments-charge cards established to build credit- never late-pay more than minimum-when can apply for FHA loan, or any home loan. rent payments much higher than what my desired home loan payment would be-please advise. bankruptcy discharged-april-2007
lived here three months would like to put house up for lieu and get fha loan to fix it up. do you have to live in the house for a certain amount of time before you can do this?
Hi Ruth,
As 2 years have passed since your bankruptcy has been discharged, you will be able to apply for a FHA loan now. You should start contacting the local mortgage lenders and apply for a FHA loan.
Hi Marcy,
As you own the home, you will be able to apply for a FHA home loan. If you have the required credit score, income and debt to income ratio, you will be able to get the mortgage.
As 2 years have passed since your bankruptcy has been discharged, you will be able to apply for a FHA loan now. You should start contacting the local mortgage lenders and apply for a FHA loan.
Hi Marcy,
As you own the home, you will be able to apply for a FHA home loan. If you have the required credit score, income and debt to income ratio, you will be able to get the mortgage.