After going through a foreclosure, many people are unsure whether or not buying a home again is a possibility. In most instances, it is possible to qualify for lending and purchase a home. If you have been through a foreclosure and want to buy a home, here is what you need to know.
Know the Wait Periods
Lenders usually impose a waiting period for people who have been through foreclosure. Until that time has passed, you cannot be approved for a new home loan. The waiting period can vary by lender. Take some time and learn what the wait periods are for the lenders you are considering.
It is important to note that there are some lenders who offer buy-now loans. Buy-now loans typically come with a higher than normal interest rate and an adjustable interest rate. If you take a buy-now loan, you could run into the same financial problems that led to the loss of your first home.
Be Vigilant About Your Credit
During the waiting period, you need to be extra careful with how you use your credit. One of the most important things to do is try to avoid taking on financing items, such as a car or furniture. When you take on more credit accounts, you can reduce the amount of available credit that you have, which can lead to a denial on your mortgage application.
You also need to focus on paying all of your bills on time. Any negative accounts on your credit report could put you at risk of being denied when you do apply for a loan.
Apply for Pre-Approval
Once you have reached the end of the waiting period, you should apply for pre-approval. Since you have been through this process before, you know what to expect. Have all of your financial documents available for the lender to review.
If there are additional steps you need to take, the lender will let you know. Be sure to return any necessary documents in a timely manner to avoid delaying the home buying process.
Work With a Real Estate Agent
Even though you have previously been through the home buying process, you need to work with a real estate agent. An agent will help to steer you towards properties that fit your budget and can even help with determining the actual value of a property.
A real estate agent can also offer help with negotiating the price of a home. The agent provides you with representation in the process and helps to protect your interests.Share