Tips on Getting a Mortgage After Foreclosure

Blog Post Image
Real Estate

No one wants to go through the foreclosure process, but if you have a foreclosure in your past, it doesn’t necessarily mean you won’t be able to get a mortgage. It’s possible to get a mortgage following a foreclosure, as long as you understand the process.

So what, exactly, do you need to know in order to secure a mortgage after dealing with a foreclosure?

A recent article from outlined what potential homeowners need to know if they have a foreclosure in their past, but want to buy another home in the future, including:

  • You’ll have to wait. As mentioned, it’s possible to get a mortgage following a foreclosure, but not right away. If you’ve experienced a foreclosure, there’s a waiting period before you can apply for another loan. How long that waiting period will ultimately depend on the loan program; for example, you’ll have to wait at least seven years for a conventional loan, while FHA loans have a required three-year waiting period.
  • You’ll have to rebuild your credit. A foreclosure can cause your credit score to take a serious drop. If you want to secure a mortgage, you’ll need to repair that drop and get your score up; most lenders will want to see a credit score of at least 580. To ensure your credit score is headed in the right direction, keep credit card balances low and pay your bills on time.
  • Be wary of non-prime lenders. Some people want to buy a new home sooner than the waiting period associated with more traditional loans, so they head to non-prime lenders. These lenders may offer loans immediately following foreclosure, but be wary; these loans often come with high interest rates and less-than-ideal terms.