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?
Hi meghartmacy,
Your query has been replied to in the given page:
http://www.mortgagefit.com/bankruptcy/getnewloan-afterchapter7.html#174804
Take a look at it. Hope it helps you.
Take care.
Your query has been replied to in the given page:
http://www.mortgagefit.com/bankruptcy/getnewloan-afterchapter7.html#174804
Take a look at it. Hope it helps you.
Take care.
my bankrupcy has be discharged since 10/10. I just got an intent of forclosure on my house which was included in the bankrupcy. i do have good income and am looking to find out when I would be able to get a mortgage.
Hi bdazzled!
Welcome to forums!
Depending upon the type of bankruptcy you file, you will have to wait for 2-4 years in order to qualify for a mortgage to buy a new property.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Depending upon the type of bankruptcy you file, you will have to wait for 2-4 years in order to qualify for a mortgage to buy a new property.
Feel free to ask if you've further queries.
Sussane
At this point Aug, 2010, how long does it have to be since the foreclosure before a conventional loan will get approved?
Hi ErinA,
You need to wait for 3-4 years after a foreclosure in order to qualify for a mortgage.
You need to wait for 3-4 years after a foreclosure in order to qualify for a mortgage.
I am in the midst of a heated divorse. The mortgage is in soley my EXs name (not mine) however the deed is in both his name and mine. He claimed bankruptsy but did not reaffirm the mortgage. Since I am not on the mortgage but I am 50% owner of the home, where do I stand?
hi theresa,
you're not responsible for the mortgage dues as your name is not mentioned on the mortgage deed. you can sign a quit claim deed and transfer your share of the property to your ex. thus, you will be released from all liabilities toward the property.
thanks
you're not responsible for the mortgage dues as your name is not mentioned on the mortgage deed. you can sign a quit claim deed and transfer your share of the property to your ex. thus, you will be released from all liabilities toward the property.
thanks
I am trying to find information on the web, and not succeeding finding consistent information, regarding what the rules are and what loans we might have as options, to buy a home. We were hoping to buy a home in April 2011, or shortly thereafter, which will be the 2 year anniversary of our bankruptcy's discharge. However, a local lender has told me because our house was foreclosed upon (and sold at a trustee's auction one month later, in May 2009), that regardless of our BK being 2 years old, we'll have to wait til May of 2012 now to buy a house. My lender says once 2 years have passed officially for our BK however, we could do a letter of explanation and request a special dispensation of the 3 year rule and see if the lender will grant it to us. (We ended up having to file BK several months after I lost my job, once negotiations with our mortgage company failed to lower the payment to an amount we could afford on just my husband's income). We should have only about $8k to put in to the house or closing costs and we are looking in the price range of $175k to $200k. Our credit has rebounded quite well since the BK ( no lates on one car loan, personal loan and a perfect 2 year rental history and now a small credit card for each of us have helped repair our credit to mid 600's in less than 2 years). With all this, we are still being told NO to getting a new mortgage loan unless we are lucky enough to get an exception, and from what the web has to say, that doesn't look likely. :( So I guess we'll have to wait another year and a half, dump more money into a rental instead of our own home, and hope the market around here is still low unless someone has some hope to throw our way? :)
im in a forclosur working on modification plan to sell should bring more than owed on home. moving to a nother state .how do i get a mtg. with this on my credit thank you
Client is 2 yr 5mo past a foreclosure. Trying to get financing, any help?
Hi!
Welcome to forums!
Hi dan,
If your property is foreclosed by the lender, then you won't be able to get a mortgage immediately. If you have a mortgage in your name and have defaulted on the payments or facing hardship to pay off the dues, you won't get another loan to buy a new property.
To jnhartin,
After a foreclosure, the person has to wait for 3-4 years in order to qualify for a new loan. I would suggest your client to wait for few more months and then apply for a mortgage.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Hi dan,
If your property is foreclosed by the lender, then you won't be able to get a mortgage immediately. If you have a mortgage in your name and have defaulted on the payments or facing hardship to pay off the dues, you won't get another loan to buy a new property.
To jnhartin,
After a foreclosure, the person has to wait for 3-4 years in order to qualify for a new loan. I would suggest your client to wait for few more months and then apply for a mortgage.
Feel free to ask if you've further queries.
Sussane
i had forecloure on my house in 2007
i am renting a house and paying $1400 per month rent
looking for a new home loan
please advise
i am renting a house and paying $1400 per month rent
looking for a new home loan
please advise
Hi A.K.!
Welcome to forums!
You had a foreclosure 3 years ago. In such a situation, you'll be able to get a mortgage to buy a new property if you have improved your credit score and have a good financial situation now. You should contact local lenders and start applying for mortgage.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
You had a foreclosure 3 years ago. In such a situation, you'll be able to get a mortgage to buy a new property if you have improved your credit score and have a good financial situation now. You should contact local lenders and start applying for mortgage.
Feel free to ask if you've further queries.
Sussane
We need to know if we buy a new house the foreclosure bank cant take us away from the house?