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Hilary Johnson's Blog

By Hilary Johnson | Agent in Fredericksburg, VA

Buying A Home After Foreclosure/Bankruptcy


Buying a Home After Foreclosure/Bankruptcy

Many of the home owners who lost their home to foreclosure 2006-2010 will be able to buy a home again. 

Poor advise or no advise on their financial situation after the loss of their home or filing bankruptcy will hold many would be purchasers back.  Fear of reviewing their credit file or having a third review their credit file will hold most of them back from the American dream of Home Ownership.

Steps you can take to regain your financial footing!

The biggest and for most the hardest is reviewing their credit file after the foreclosure or bankruptcy.  Fear...Shame..embarassment and even anger over the loss of their home or what was good credit is hard to get past for some....Facing this fear head on is the first step..

Step 1

www.myfico.com There is a small fee involved but you will get your true credit score...used by mortgage lenders this is the score that your loans are based on.

https://www.annualcreditreport.com/ set up by the three major credit bureau's to provide 1 FREE annual credit report each year.  The credit score you see here will NOT be your true credit score...this is just a tool to review your credit file

Step 2.  


Review the credit file.  Often after a bankruptcy not all creditors report the information correctly.  Take out a highlighter and go through the credit report carefully....credit bureau's can often put negative items on your credit by mistake...make sure all information is correct and if not you can report the discrepcancy to the credit bureau on line or in writing. With more and more people becoming victims of ID theft everyone should be checking their credit file every year.

Step 3 and 4...

These 2 steps should be done at the same time...Rebuild your credit and Save money!  Go to your bank and apply for a credit card where you pay an amount up front..usually around $400.  The credit bureau's do not see any difference between a regualr credit card and a "pay up front" credit card.  Use this card to rebuild your credit..never use more than half the available limit and dont make a late payment. Open a savings account....each month have a transfer of funds from your checking account to your new savings account...you can start small and after step 5 increase the amount.

Step 5.

Find ways to cut back on expenses....everyone likes their morning cup of Java from Starbucks so buy coffe once or twic a week and the other days bring coffee from home. You could even use this savings amount to determine the amount each month to place in your savings account

After a foreclosure or bankruptcy it will take at least 3 years before you can buy a home using FHA. Using the steps 1-5 your credit will have improved and lenders will see that you are once again good credit risks. There is never a better time to start than NOW to rebuild your credit and be on your way to home ownership again! 

DO NOT ever pay a fee to anyone who says they can repair your credit...seek professional assistance!



CLICK HERE TO SEARCH FOR HOMES

Hilary Johnson, Realtor
Keller Williams
302 Westwood Office Park
Fredericksburg VA 22401
Licensed In The State Of Virginia


Comments

By Laura Feghali,  Sun May 5 2013, 06:30
Very helpful post!
By Patti Kane,  Thu Jun 13 2013, 01:14
I had a short sale last year and my Realtor recommend http://www.cfs-mortgage.com/flex for a home loan. I am very happy to be able to purchase again.
CFS Mortgage assists homeowners who have recently been through a foreclosure, short sale or have recently emerged from bankruptcy.
By Hilary Johnson,  Thu Jun 13 2013, 02:35
thank you Patti for posting this information
By Roy Bush,  Sun Jul 21 2013, 12:02
Check out CFS Mortgage's loan program at http://www.cfsflex.com. They allow a mortgage after a foreclosure, short sale, or bankruptcy. There is only a six month waiting period. This is perfect for individuals looking to become homeowners again.
 
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