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?
Welcome lily,
Your query has been answered in the given page:
http://www.mortgagefit.com/foreclosure/new-house.html
Take a look at it. Hope it helps you.
Your query has been answered in the given page:
http://www.mortgagefit.com/foreclosure/new-house.html
Take a look at it. Hope it helps you.
I lost my house to forecloser 2years ago . Do I STILL HAVE TO PAY ON THE MORTGAGE?
Hi CBECERRA!
Welcome to forums!
The lender has the rights to collect the deficient amount from you. Thus, he can come after you to collect the deficient balance from you after the foreclosure.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
The lender has the rights to collect the deficient amount from you. Thus, he can come after you to collect the deficient balance from you after the foreclosure.
Feel free to ask if you've further queries.
Sussane
I am in the redemption period of foeclosure, will it be possible to find a lender give me a loan to pay my current mortgage back?
Hi Bobbi!
Welcome to forums!
As you're into foreclosure, the lenders will not be ready to give you a mortgage in order to pay off your back payments.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
As you're into foreclosure, the lenders will not be ready to give you a mortgage in order to pay off your back payments.
Feel free to ask if you've further queries.
Sussane
Hi Jessica
could you give me a list of a few companies that might give me a loan, I had a foreclosure a 2 years ago. I don't mine paying a slightly higher interest rate.
Thank You
could you give me a list of a few companies that might give me a loan, I had a foreclosure a 2 years ago. I don't mine paying a slightly higher interest rate.
Thank You
Hi andy!
Welcome to forums!
It will be difficult for me to give you a list of companies which can offer you a mortgage. However, you can contact the local lenders and apply for a mortgage. If you meet the required criteria of the lender, then you'll be able to qualify for a loan. This community has a large number of lenders. You can seek a no obligation free mortgage quote from them and check out if they can help you in getting a mortgage.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
It will be difficult for me to give you a list of companies which can offer you a mortgage. However, you can contact the local lenders and apply for a mortgage. If you meet the required criteria of the lender, then you'll be able to qualify for a loan. This community has a large number of lenders. You can seek a no obligation free mortgage quote from them and check out if they can help you in getting a mortgage.
Feel free to ask if you've further queries.
Sussane
We had to file chpt 7 and included the home in it. However, they still processed it as a foreclosure with notes on my credit report that it was relinquished under chpt 7. Do you know any lenders that will finance me..my credit score is over 600.
Hi Guest,
You won't be able to qualify for a mortgage after a bankruptcy now. You will have to wait for 2-4 years in order to get approved for a mortgage.
You won't be able to qualify for a mortgage after a bankruptcy now. You will have to wait for 2-4 years in order to get approved for a mortgage.
My credit score is 670 I was foreclose on year ago what can I do.
Hello, I have a credit rating well over 700, as does my husband. We are under water more that 100k on our first home and are contemplating strategic foreclosure. How low do you think our credit will drop and how long until we will be able to get a decent rate on a new mortgage?
Hi jb,
After a foreclosure, your scores will get reduced by 250 points. You will have to wait for 3-4 years in order to get a mortgage after foreclosure.
Thanks
After a foreclosure, your scores will get reduced by 250 points. You will have to wait for 3-4 years in order to get a mortgage after foreclosure.
Thanks
ok so we claimed BK when home was about to be foreclosed on. well guess what BK was discharged 2 years ago and home is still sitting there- no officially foreclose proceedings and still shows in our name. how can we get new loan for home now. trying to buy since BK was discharged 2 years ago. when the home we claimed in BK is still showing in our name as bank has not even tried to sell it or cease it etc. What do we do?? can we get another loan??
Hi badabing,
Unless the previous property is sold off, it will be difficult for you to qualify for a new loan. You should contact your lender and ask him to sell off the property asap so that you can qualify for a new loan.
Thanks
Unless the previous property is sold off, it will be difficult for you to qualify for a new loan. You should contact your lender and ask him to sell off the property asap so that you can qualify for a new loan.
Thanks