As the real estate market continues to improve, a frequented question is, “can I buy again after foreclosure?”.
More and more families are looking to buy after having faced foreclosure within the past 10 years. We should all know by now that a foreclosure and even bankruptcy take a bit hit on your credit. The question remains, how do you recover? The best answer I can give is time. It takes time to recover from a foreclosure. It takes time to build back credit. Have a plan in place with your accountant to work on building back a savings, your credit score, debt reduction, and so on. It’s a lot like losing weight – if you stick to the big picture and not give in to the small urges, eventually you’ll see a result!
Although lenders have tightened up their guidelines in the past few years, there’s still hope out there. Mortgage companies have learned from their past mistakes and it’s not likely that we’ll see a large mass of bank-owned inventory on the market. In fact, as our market has picked up, foreclosures are selling off and no longer being replaced on the market.
Waiting period to buy after foreclosure
- Fannie Mae/Feddie Mac: SEVEN years, but the lender can make exceptions at THREE years if extenuating circumstances are met such as job loss or death of a wage earner
- VA: Two years (but the buyer must have paid the VA for its loss before qualifying for a new VA loan)
- Federal Housing Administration: THREE years with earlier exceptions
For more information on foreclosures, best practices, next steps, and how to avoid, check out Freddie Mac.
Hampton Roads Real-e-statement is written by Alyssa Godwin, a Realtor with Liz Moore and Associates. For questions regarding foreclosures and the next steps, contact Alyssa at 757-329-6161 or email@example.com. You can also find Alyssa on Facebook or on the web at www.lizmoore.com/alyssagodwin.