Tips on Buying a Home After a Foreclosure
Many homeowners have lost their homes via foreclosure due to the financial and real estate collapse. A foreclosure on a person’s record can tank their credit scores by 80 points or more. Fortunately, the credit scores will increase as the foreclosure ages and there are many ways in boosting credit scores. One such way is by getting secured credit cards or their types of credit such as auto loans and installment loans. Buying a home after a foreclosure is possible but there are certain restrictions.
How Difficult is Obtaining a Home Loan After Foreclosure?
If you are interested in buying a home after a foreclosure, there is a three year waiting period from the date your name has been transferred out of the deed of the house into the mortgage lender’s name or the date of the sheriff’s sale. There is no exception. I am a licensed Illinois and Florida mortgage broker and correspondence lender that specialize in helping mortgage loan borrowers with prior bad credit and high debt to income ratio mortgage loans and can help even mortgage loan borrowers with credit scores under 600 as well as borrowers with open collections and judgments but there is nothing I, or anyone else in the mortgage industry, can do to waive this mandatory 3 year waiting period in buying a home after a foreclosure.
Rebuilding Credit is Key in Buying a Home After a Foreclosure
For those folks who have recently gone through a foreclosure, they should start reestablishing their credit right away. One of the many requirements that most mortgage lenders require for borrowers who had a prior foreclosure or bankruptcy is that they do not want them to have a late payment on their credit record after a foreclosure or bankruptcy. Make sure you make timely monthly payments. Get 3 secured credit cards and use them regularly. Keep in mind to always have your credit balances below 30%. Maxing out on your credit cards will hurt your credit scores. Do not apply for new credit too often Credit inquiries, hard pull, will decrease your credit scores. Try not to apply for no more than two credit items in any six month period. Try to get an installment or car loan. For example, if you need to purchase a used car for $2,000 and have the cash to buy it outright, see if you can put $1,000 and finance the other $1,000.
Mandatory Waiting Period After a Foreclosure
For those who cannot wait the 3 year mandatory wait period in buying a home after a foreclosure, they would need to have a family member purchase it under their name and credit. Many home buyers have their parents purchase the home as a second or investment home. They can be on the title but not on the mortgage loan.
If you have any questions in buying a home after a foreclosure in California, Texas, Indiana, Kentucky, New Jersey, Nevada, Illinois or Florida, please contact me at 262-716-8151 or email me at firstname.lastname@example.org or you can visit me at www.gustancho.com.
Gustan Cho, NMLS ID 873293