how bad is a foresure on your credit? Would it be hard to buy a home again after a few years?

Asked by Joe Anthony, 92532 Wed Feb 6, 2008

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11
Tman, , 30642
Sat Feb 9, 2008
Joe,

It's just not the foreclosure, it's how the foreclosure effects your other creditors and lenders ...

Everything on your credit report gets looked at every 45 days by your Visa, MC, any current car loans, etc ... even car insurance is rated by your credit report.

Once everything catches up in 8/10 months after the foreclosure .. credit cards rates go up or get limited, or just plain canceled, car insurance goes up, thats because your credit score goes through a domino effect in a downward spiral ... not good.

Trying to get a car loan will be like pulling teeth and you'll pay 15/18% with a large down payment ... you'll always be able to purchase a home (kinda) with a huge interest rate at 9/12% or some crazy land contract that expires in 24 months because your FICO has dropped from 780 to 580 ..

I appreciate Liz's honesty, she said it best: "You can live through it, and be fine renting, saving, and rebuilding credit and confidence."

-
2 votes
Corey Grushin, Agent, East Brunswick, NJ
Thu Feb 7, 2008
A Foreclosure or "Deed in Lieu of Foreclosure" is very bad for you credit report, but it does not exclude you from buying a home in a few years. Any negative remarks reported by creditors will stay on your credit report for 7 to 10 years.
As of today (rules are always changing in todays market) you can qualify for an FHA mortgage after 3 years. If there was extenuating circumstances (ie extended hospital stay, documented depression due to a trematic event,....) you may be able to qualify after 2 years.

A Fannie Mae/Freddie Mac conventional loan requires 4 years to pass to be able to qualify for a new mortgage.

Sub prime loan programs which wi lhave a much highrer interest rate would probably require at least a year to pass before you would qualify for a mortgage from them. I'm not totally sure about the sub prime answer to your question because these programs are always changing in lieu of market conditions or thr companies are going out of business.

The link below will take you to FHA guidelines , Under the single family guidelines click on the section "4155.1 Mortgage Credit Analysis........" and go to page 33 item D on the bottom of the page for the full explanation.
1 vote
Liz Stevens, , Berkeley, CA
Wed Feb 6, 2008
It takes seven years of rebuilding your credit to have a foreclosure not be seen on your credit report. I know, I had one. Two years does not do anything. After a bankruptcy, you can sometimes find a lender who will loan to you with a large down payment and perfect credit after the bankruptcy, but the rates will be very high. Buying a home can happen again for you, but you must rebuild your credit a bit at a time after foreclosure. You can live through it, and be fine renting, saving, and rebuilding credit and confidence. All the Best. Liz
1 vote
Martin Monta…, Agent, Corona, CA
Tue Feb 26, 2013
Hello Joe
A foreclosure is not what you want on your credit, it could affect other areas where your credit is looked at. Are you asking this because you are considering letting your house go, or because you have already lost your house to foreclosure?

Yes it is possible to purchase again in a few years.
Contact me I work with a lot of people who have either lost their home or are still in time to avoid foreclosure.

Avoiding foreclosure is the best option when ever possible.

Feel free to contact me with any questions
Martin Montanez
myhomenow@hotmail.com
0 votes
Roger &…, , Lake Elsinore, CA
Tue Feb 26, 2013
Joe, A foreclosure will hurt your credit quickly and it will take a big nose dive. If your home is the only thing that you are not paying on now, keep making your payments on your credit cards. Keeping the credit cards current with no lates whatsoever should bring your credit back up. The foreclosure will stay on the credit report for several years but if you keep all other accounts current you will see your scores move up. After 2 years you will probably be able to buy with 20% down.
0 votes
Debt Free Da…, , 85260
Mon Feb 11, 2008
Web Reference:  http://getprequalified.com
0 votes
Julia Huntsm…, Agent, Long Beach, CA
Sat Feb 9, 2008
Hello Joe, Whether or not it would be difficult to buy a home again after a while depends on current loan guidelines, and if you've established some other positive credit lines at that point in time. It will stay on your credit report for a longer period of time, but you should check with a mortgage consultant if you want really accurate feedback as to what they use to determine your loan elibigility. Read the article link for some specific information. You can always find me at my website at http://www.juliahuntsman.com.
0 votes
Dot Chance, Agent, Burbank, CA
Thu Feb 7, 2008
Joe, were you able to look at http://www.creditinfocenter.com?

In accordance with the Fair Credit Reporting Act, there are things that can be reported on your credit report for 7 years and some (such as Bankruptcy) that can stay on your report for up to 10 years).

You will be able to verify how long a foreclosure will stay on your credit by searcdhing the site and their message boards. You can also look up the Fair Credit Reporting Act (I believe it was written in 1972 or 1974).

However, I have heard of people who went through a terrible time and had a foreclosure that were able to buy again after only a couple of years. These people may have been the exception.

Wishing you well,
Dot
Web Reference:  http://www.DotChance.com
0 votes
Tisza Major-…, Agent, Upland, CA
Thu Feb 7, 2008
Hi Again Joe,

How bad is a Foreclosure on your credit report? Pretty bad. Seven to eight years is about how long they can hang on. It won't be the end of the world, but for almost a decade it can feel like it is. A Short Sale (which means that the lender is getting "shorted" with their permission, on the amount they are owed) can hurt you for two to three years.

In both cases, a more rapid recovery can occur if you are really dilligent about working on repairing your credit by paying your bills on time or early.

Once again, I will urge you to contact me at your earliest convenience to see if there is anything that can be done to prevent the Foreclosure.

I truly just want to help and hope to hear from you soon.

Take care,

Tisza Major-Posner, Realtor, Keller Williams (909) 837-8922
Web Reference:  http://Route66Living.com
0 votes
Dot Chance, Agent, Burbank, CA
Wed Feb 6, 2008
Hi, Joe. Yes, a foreclosure looks bad on your credit as do late payments. Sometimes people can buy again after two years. With hard work and credit repair you can rebuild your credit.

If you wait a couple of years after a foreclosure and spend that time diligently working on improving your credit you should be in pretty good shape.

An excellent site to visit to educate yourself on credit repair is http://www.creditinfocenter.com
Web Reference:  http://www.DotChance.com
0 votes
Kim Gassert, , 17042
Wed Feb 6, 2008
The most important thing you can do is repair your credit. Pay all bills on time. Any lates are going to have an impact on your credit. With the recent mortgage uproar, lenders are tightening their reigns on who gets approved for mortgages. By staying on top of your credit, you increase your chances of getting a future approval. Lower credit scores usually result in higher interest rates. The better your credit, the better deal you will get.
0 votes
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