Life After a Foreclosure: Purchasing Another Home

It’s no secret that a lot of people lost their homes during market crash in 2007, but having a foreclosure on your record doesn’t mean you’re relegated to the rental market for the rest of your life. At the end of the day, if you plan ahead and are diligent with your finances, you can be a homeowner again.

Here are a few things you can do to improve your chances of getting approved for a loan.

TIMING. You are eligible to purchase again within three years of the date of your foreclosure.

BE PROACTIVE. In an effort to expedite the process of securing a loan, make a point to contact the county where your foreclosure occurred in order to obtain a copy of the foreclosure deed. Not only will this be one of the first documents that a lender will ask for, but it will show the exact date of your foreclosure so you’ll have a better idea of the date you’re working towards.

RE-ESTABLISH YOUR CREDIT. No matter your financial situation post-foreclosure, you’ll want to make sure you have the opportunity to nurse your score back to health. Therefore, if you need to obtain another line of credit, you can always get a secured card from your local bank. With this, it’s worth noting that you’ll still want to make sure you keep your balance at or below 30% of your credit limit, since anything above that may negatively impact your score.

CONTACT A LENDER. If getting back into a home is high on your priority list, you’ll want to take a proactive stance. In an effort to ensure that you have ample time to fix any logistical or financial issues, it’s wise to make contact with a lender at least six months in advance of your eligibility to purchase again. That way, your lender will be able to work with you so that once your three-year time requirement has passed, you’ll be ready to apply for a loan.

DOWN PAYMENT. You will need a minimum of 3.5-5% of the sale price as your down payment, but more than that is always a good thing. Plain and simple, the more upfront equity you put into your home, the better.

CONCLUSION

Going through the stress of a foreclosure can be devastating, especially if you did everything you could to save your home. However, it’s truly not the end of the road. While gaining approval for another loan may take a good bit of time and discipline, it can be well worth it in the end.

As a Certified Distressed Property Expert (CDPE), I’m well versed in helping families through difficult housing situations and assisting them when they’re ready to begin the buying process again.

If you’ve gone through a foreclosure and want to know more about purchasing another home, I’d be happy to not only put you in touch with a reputable lender, but to help you assess your options as well.

Please feel free to contact me.

Pam Evans | Hello Pam Evans | www.HelloPamEvans.com | 678-778-6551