Buying a home after having been through a foreclosure might seem like an impossibility, but there are options available that will allow an individual or family to purchase a home after such an event. Making sure to take care of some basic research before making the application for aÂ mortgage after foreclosure, will improve chances for approval.
Before Applying for the Mortgage After Foreclosure
A few recommended projects for potential home owners going throughÂ mortgage after foreclosureÂ in California include:
Build new credit
Maintain on-time payments
Have no accounts in collections
Cleaning up a credit report prior to applying for a mortgage is recommended and may be a requirement for certain loan programs.
Dealing with the Right Mortgage Lender
Not every bank looks favorably upon applicants for mortgages who have had a foreclosure in their past, and itâ€™s important to do some searching before settling on a lender. Different lenders possess different approval rates for mortgages obtained after a foreclosure, and investigating these numbers may make it easier to get through the application process.
In addition, it is vital that an applicant understands the options available through theÂ Flexible Credit Home Loan Program, which has been specifically designed for former home owners who went through a foreclosure.
With most banks requiring a huge credit score of 700, which most individuals who went through a foreclosure wouldnâ€™t have, finding a lender for aÂ mortgage after foreclosureÂ in California would be almost impossible without special assistance or programs.
Requirements for Flexible Credit Loans
AÂ Flexible Credit LoanÂ does require that an applicant has at least six months of payments in their possession so as to guarantee several months of successful payments. There is also a minimum loan amount for the new mortgage of $100,000, and borrowers need to be able to provide at least 25% of the total loan amount as a down payment.
In addition, the only residences allowed for this type of loan are primary residences. Commercial properties do not qualify. An applicant is also going to want to make sure that their credit score is 600 before applying for aÂ mortgage after foreclosureÂ in California.
Home Ownership Instead of Renting
The act of undergoing a foreclosure doesnâ€™t mean that a person is doomed to rent their home forever, throwing money down the drain each month. With the Flexible Credit Loan, a family can start to build equity again in their own home after their unfortunate experience with foreclosure.