If you lost your home due to foreclosure, you probably haven’t given up on the dream of owning a new home. The good news is that a number of guidelines have changed which may allow you an opportunity to buy that new home sooner than you think. Arming yourself with this information may help you qualify again for a mortgage.
Foreclosure With Extenuating Circumstances
Normally, lenders will take into consideration any extenuating circumstances surrounding the foreclosure on your real estate.
Was there a death or illness that prevented you from earning money to pay your mortgage? Did you have a job transfer that came with a steep pay cut? Were you severely injured and temporarily disabled as a result? You can add a memo that explains any lapses in credit worthiness and this report can be as long or as short as needed.
It’s very possible the waiting period can be shortened for documented extenuating circumstances. Traditionally seven years, these waiting period guidelines may have changed since you last looked. Our advice is to get up to date information from a qualified mortgage professional.
Deed-in-Lieu of Foreclosure and Short Sale
You may be wondering what the waiting period for financing is if you have exercised a deed-in-lieu of foreclosure or successfully negotiated a short sale. Fortunately many lenders offer options if you were able to avoid an actual foreclosure.
Traditionally the waiting period for a deed-in-lieu of foreclosure can be four to seven years. If there were special circumstances surrounding the deal, you might be able to qualify in as little as two years. The lender may have certain down payment or credit score requirements as a condition of approval.
Getting financing after a short sale generally has the shortest waiting time before qualifying for a new home loan. Usually the lender will only require a two-year waiting period before they’ll approve financing. Once again, a call to a licensed mortgage professional will give you the most up-to-date information.
The good news about financing after foreclosure is that it is possible. If you need a recommendation for a lender, give us a shout and we can point you in the right direction.