Losing your home to foreclosure can be heart-wrenching, but there is light at the end of the tunnel! While some who have been through it believe they have to wait up to seven years before trying to buy again, in actuality, you may be eligible for a FHA loan three years after foreclosure. If they required previous homeowners to wait seven years, the housing market may never recover.
Here are a few facts about qualifying for an FHA loan after foreclosure. You do have to wait until three years after your foreclosure is finalized. Your credit score will be reviewed, and in most cases, a minimum score of 620 needs to be maintained. Even if you have faced more financial difficulties since the foreclosure, don’t assume you are out of luck. Talk to a mortgage professional to explore your options.
A Word Of Caution
While you may be able to get a loan sooner than three years after foreclosure, the high-risk lenders will limit your options. High-risk lenders often charge very high interest rates and fees, thus turning you quickly upside down, once again, on a home. If you can, wait at least 24 months before considering buying a home. If you must buy sooner, 12 months of improvement on your credit history can make a big difference in the interest rate you will receive.
Having a home foreclosed on is life changing. In most cases, the foreclosure was unavoidable, due to job loss, a cut in pay, or serious illness. Just remember, it does not put the dream of home ownership out of your reach. If you are facing, or have faced, losing your home, there are steps you can take to minimize the damage.
If you live in the Smith Mountain Lake area and want to know more information about buying your next home, call Vicki Millehan. She is your local real estate resource!
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