Getting a mortgage loan for buying a home is already difficult without a foreclosure on your record. With one, you’ll generally have to be patient. Plenty of lenders will be willing to look past a history with a foreclosure, but you’ll have had to reestablish a good credit score since then. The amount of time needed with good credit since the foreclosure will depend on the loan you seek.
Types of Mortgage Loans for Buying a Home
- Conventional loans – Conventional loans require the longest waiting period. They demand for you to wait seven years after a home foreclosure to apply for a loan. Another obstacle to getting a conventional loan is that they sometimes call for higher credit scores.
- VA loans – Department of Veteran-Affairs backed loans typically have a two-year waiting period. To be approved for one, you must have actively served in the military for a minimum duration of time. The amount of time differs depending when you were active. Under certain conditions, spouses of a Veterans can also apply for home loan eligibility.
- FHA loans – Loan programs offered through the Federal Housing Administration can be approved after a waiting period of three years. However, it is possible to obtain an FHA loan within a year. To be approved, you must convince the administration that your prior home default was due to a significant hardship that has since passed.
Again, having good credit allows you to wait these lengths of time. Going through a foreclose, however, can lower a credit score by over 100 points. To restore your credit score, you’ll need to pay all bills on time, avoid taking on any new debt, and start putting money away in savings.
Putting away money as early on as possible is important, as some banks require large down payments. If you’re considering buying a new home after a foreclosure, contact a local attorney to ensure your wait goes by as quickly as possible.
Washington D.C. bankruptcy attorney Kevin D. Judd has been helping people throughout the D.C./Maryland area find the best solutions to their own financial problems for years, and is proud to have helped them achieve their goal of becoming free from financial burden.