Losing your home in a foreclosure is a traumatic experience. Not only that you will be looking for another place to stay, foreclosure has a negative impact on your credit score. The good news is, you can buy a house again even with foreclosure on your credit history.
How can I buy again? How long do I have to wait? These are the common questions from home owners who have had foreclosure. One way to ensure and improve your odds of getting another home is to work on your credit score. You can start by paying your other credits on time, such as credit cards or auto loans. Make sure that these payments are reported to credit bureaus every month. Making on-time payments will increase your credit rating and will more likely get you another mortgage to finance a new home.
Timing is also a determining factor. The longer you wait to purchase a second home can work on your favor. More waiting time means more chances of repairing your credit score. Oftentimes, lenders will take into considerations the past 2 years of your credit history following foreclosure.
Typically, the waiting period before buying a home following foreclosure is seven years. This is also the same time required by Fannie Mae; a federal entity that grants home loans. An exemption of three years if the reason of foreclosure falls under extenuating circumstances such as death of family member, job loss, divorce or illness. To apply for home loan with extenuating circumstances, you are required to submit documents to validate your claim. Along with this, you might also be asked to present an updated credit report.
Owning a second home is not impossible but it surely is a struggle. What if you can stop foreclosure? Then you don’t have to worry about repairing your credit score. You can move on with your life and buy another home whenever you’re ready. Sell your home quickly to private investor like Lucas Properties LLC. You might lose your home now but with your credit score in top shape, you will be able to purchase another home in no time.