Financing in 44305>Question Details

Donte, Home Buyer in 44305

I have a foreclosure on my credit will this stop me for getting another house loan..?

Asked by Donte, 44305 Fri Jul 22, 2011

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• FHA & USDA require 3 years from the foreclosure sale date/when the home is no longer legally in your name (only 1 year if it was due to extenuating circumstances)
• VA requires 2 years from the foreclosure sale date/when the home is no longer legally in your name (only 1 year for extenuating circumstances)
• Fannie Mae & Freddie Mac require 7 years from the foreclosure sale date/when the home is no longer legally in your name (4 years if it was due to extenuating circumstances)

In all situations you need at least 12 months of re-established credit and 3 traditional trade lines, some lenders want 3 trade lines of 12 months each. Other than medical collections that can be properly explained, if there are any late payments or delinquent accounts (collections, charge-offs, judgments, tax liens) after the foreclosure then the time seasoning often starts over again from the latest late payment/delinquent mark (underwriter's discretion).

Having a verifiable on time housing payment history goes a long way to making an underwriter feel comfortable, as well as taking a pre-purchase housing counseling class with a budgeting/financial module. Practically anything you can do to prove that you have made & kept a vow to make all payments on time will be helpful.
2 votes Thank Flag Link Fri Jul 22, 2011
Hi Donte,

You can get home loans from various sources. For example, if you have a family member or a friend who has money in a CD earning 1%, you might be able to have them put the money up for your home loan and then you pay them 5% or 6%. It is a better return for them as well as helpful to you.

You might be able to find a home you like where the seller will carry financing for you. You would give them a down payment and then make monthly payments to them.

You might be able to do a lease option

You might be able to do a rent to own

There is typically a wait period after a foreclosure and depending on which type of mortgage product you choose, or get sold will determine how long that wait period is.

Obviously, the correct thing to do would be to work towards homeowner ship. This would start with improving your credit rating, get a large down payment saved up, make sure your tax returns are in good standing, then apply for a mortgage product to find a good quality product that suits your needs, and then locate a suitable home. This of course is boring and takes hard work and planning, something so few are willing to do these days.

I hope this helps! Good luck

Hannah Fliegel, FICO Pro
0 votes Thank Flag Link Sat Jul 23, 2011
Years after a foreclosure, yes. It can take as short as 3 years and as long as 7 years to get a loan after foreclosure. Fannie Mae is giving out loans to people with credit score as low as 630.
0 votes Thank Flag Link Fri Jul 22, 2011
You're probably eligible if the foreclosure is three years old.
http://www.easyprivatemoney.com/How_Long_Must_Buyers_Wait_fo…

Best,
SuZ
PML of Longmont, CO
0 votes Thank Flag Link Fri Jul 22, 2011
There are many people who unfortunately have lost a home due to foreclosure and were subsequently able to purchase a home. I'd recommend having a conversation with your lender and they'll be able to look at your individual scenario. Getting a home loan is dependent on many variables. So, the short answer it depends. Your lender will look at several things including credit, income and assets. Hope this helps.
0 votes Thank Flag Link Fri Jul 22, 2011
Donte, Generally, the foreclosure needs to be at least 3 years ago before you can purchase a home after a foreclosure. As you proceed to get yourself ready for a purchase when the time comes, I would suggest that you talk with a lender to develop a plan to be ready for the purchase when the time is right. To many times, I have seen people totally avoid credit. Because Credit Scores are based upon payment histories, you do want to establish some credit and maintain a good payment history on those accounts. Also, when it comes to rent or housing costs. Pay those accounts with a Check or Money Order. Today, lenders rarely accept rental reciepts for homebuyers that pay their rent in cash. I would be glad to share more suggestions if you want to contact me. As I tell many borrowers, Develope a Plan, Follow the Plan and then you can succeed.
0 votes Thank Flag Link Fri Jul 22, 2011
Donte,

There are many factors that will go into getting approved for a loan and time since foreclosure is one of them. I would suggest giving a lender a call and see if they can work something out.

Good Luck,

Bill Lowery
0 votes Thank Flag Link Fri Jul 22, 2011
It would depend on the lender. Each lender has its own rules and policies.
More and more often the lenders are looking at each deal on a case by case basis. If your credit history is otherwise excellent, and you have a compelling story as to what caused your foreclosure you probably have a good chance to get another mortgage after a year or so.
Contact your mortgage professional for further info and advice.
Web Reference: http://www.TomMcCombs.com
0 votes Thank Flag Link Fri Jul 22, 2011
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