Buying a home after you have experienced foreclosure.
If you have faced foreclosure in the past, looking into buying a new home might be a bit trickier than for others. The Lawhead Team would like to share some helpful tips to buying a home after you have faced foreclosure.
Many of us have experienced some form of financial hardship over the last few years such as losing our job, taking a pay cut, or a decline in the value of our investment and retirement portfolios. Many more people than some of us realize have also experienced extreme financial hardships because we have been forced to lose our homes, resulting in a foreclosure.
Losing your home can be devastating both personally and financially, but what’s important is that we do what we have to do to clean up our past and then we move into our future with hopes of making it better. One of the biggest questions that people ask when they lose their home is how long they have to wait to apply for another mortgage loan after declaring bankruptcy, foreclosing on a previous home, or having a short sale on your home.
What you need to know before you apply for a mortgage loan – There can be a lot of confusion surrounding when you can apply for a mortgage loan after a bankruptcy, foreclosure or a short sale.
Applying for a mortgage loan and being approved for a mortgage loan are two different things. Just because you are able to apply for a mortgage loan doesn’t necessarily mean that you will automatically be approved. Being approved for a mortgage loan depends on many factors such as your personal income, the amount of your savings, as well as your ability to repay the new mortgage loan. You have to take the necessary steps towards improving your personal finances, and being informed on the process of applying for a new mortgage loan after a bankruptcy, short sale, or foreclosure is a great first step.
Applying for a Mortgage Loan After a Bankruptcy – If you filed a Chapter 7 Bankruptcy you will have to wait 4 years from the discharge date if you are applying for a conventional mortgage or for a mortgage with Fannie Mae. However if you have filed several Chapter 7 Bankruptcies in the past 7 years you will have to wait at least 5 years to apply for a new mortgage loan. If you file a Chapter 7 Bankruptcy and you are applying for a mortgage loan with FHA you must wait at least 2 years from the discharge date.
If you Foreclosed on your previous home you will have to wait 5 years before applying for a new conventional mortgage loan. You will have to wait for 7 years before applying for a new mortgage loan with Fannie Mae and 3 years from the completion date of your foreclosure if you are applying for a new mortgage loan through FHA.
If you have to wait five years after financial hardships before you can apply for another mortgage loan then you have five years to get your finances in order.
Of course if you have any home buying questions what so ever, it is important to call The Lawhead Team. They can find the answer for you or direct you in the best way suited for your situation.