Home Buying in Brookside>Question Details

Joel, Home Buyer in Brookside, Stockton,...

if i foreclose my house how long can i buy another house

Asked by Joel, Brookside, Stockton, CA Sat Feb 27, 2010

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5
Hello Joel,

That'll depend on several factors of course. I've read where the 'experts' say it may be anywhere from 2-3, 3-5, or even 5-7 years. It's hard to say at this point.

It'll will depend on your credit score once the dust settles. What the current lending guidelines will be at the time you'd like to try and purchase again. As you've seen, the guidelines change/vary from time to time. There may be special programs available even in a year or two for people who have suffered from their current situation.

I've heard many times that you're better off in the long run with doing a Short Sale rather than a foreclosure. I always advise my clients to seek counsel from a reputable real estate atty and tax specialist if facing either decision.

Good luck,
Randy
1 vote Thank Flag Link Sat Feb 27, 2010
Joel, presently FHA and VA state 3 years. Preferrably you will have re establised credit and I would recommend developing a savings pattern. Your overall credit profile is taken into consideration when a lender qualifies you. Income and job stability, credit score and payment history, funds available to close. The lender wants to ensure that you have the willingness and ability to repay the debt.
0 votes Thank Flag Link Tue Mar 2, 2010
Hello Joel,

All of this answers are GREAT answers and I commend you for asking the question up front. Too many times we see homeowners wait until it's too late to explore their options and alternatives to foreclosure. You definitely want to seek advise from a Real Estate Attorney and a Tax professional regarding your specific circumstances. Realtors are not qualified to tell you which is better - letting the home go to foreclosure or do a short sale. That being said, generally the best option is to bring your mortgage current and keep it current. If there is a hardship that makes that impossible, then there are various alternatives to foreclosure including short sale. Fannie Mae/Freddie Mac guidelines are that a foreclosure can cost you in excess of 300 points on your credit score and stay on your record for 5-7 years while short sales may be as low as a 100 points on your credit score and stay on your record for 18 months - 2 years. You also want to consider your professional resume - a foreclosure on your record can be detrimental in a background check depending upon your line of work. Again, that is a general guideline and you need to consult a real estate attorney and tax professional for your specific circumstances. You might also want to sit down with a lender or two and see what their guidelines are in qualifying for a mortgage with either a foreclosure or short sale on your record. Even though lending guidelines are constantly changing, it would be a great source of information for what you might expect when you are ready to purchase again.

The best advice is to deal with the situation head on and become as informed as you possibly can and know that you are certainly not alone.

Best of luck to you,

Gail Hovey
Keller Williams Realty
0 votes Thank Flag Link Sun Feb 28, 2010
Current FHA and VA rules are three years from the foreclosed date. Two years with explanation, which has to be medical or job related.

Conforming rules are five years.
0 votes Thank Flag Link Sun Feb 28, 2010
Hi Joel,

The rules are always changing and the best thing to do may be to check with a Mortgage Consultant or Lender as to when they think you'll be able to purchase again.

Randy is right by saying it's best to seek counsel before making any decision on foreclosure or the short sale process before making this type of decision. Your unique situation may have different implications than what you read or what ordinary folks may tell you.

Let us know if you have any other questions.

Best regards,


"Rocky" G.H. Hawrysz, Realtor®, Broker Associate, CRS®, e-PRO®, ABR®, SRES®
Prudential California Realty
(209) 444-6610 - Direct Office Line
E-Mail: rocky@prucalifornia.com
License # 01468373
0 votes Thank Flag Link Sat Feb 27, 2010
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