Looking to buy a home after a foreclosure? It can be done, but you will need to give yourself at least 3 years from your foreclosure before you will be able to qualify for a mortgage. If nothing changes in the U.S. mortgage guidelines from FHA, Fannie Mae, of Freddie Mac, three years is the magic number of years to wait from a foreclosure until you are eligible to get a mortgage.
There are rumours, but nothing has been officially released by Fannie Mae, Freddie Mac, or FHA about allowing less time to pass from a foreclosure before allowing someone to qualify for a mortgage.
Renting A Home After A Foreclosure
With needing a place to live and having to wait 3 years to enter into homeownership again, your next best thing to having your own home is to rent a home. Renting a home can be a great way to get your credit back on track again. You can still enjoy the benefits of being in a home for your family, but you do not have all the expenses that typically come up as a home owner.
With this being the case, you ought to be able to save some money if you put your mind to it. Also, with your credit restoration, use this time to make sure that your credit report gets cleaned up of any residual delinquent accounts that you pay off.
Pay Your Rent Payment With A Check
Another tip about renting a home after foreclosure is to make sure that you pay your rent with a check. Underwriting guidelines call for verification of rent in many cases, especially when coming out of a sticky credit situation like a foreclosure or a bankruptcy. If you rent from a housing management company you might be in the clear with a verification of rent from them when it comes time to get a mortgage. But, if you have paid your rent with a personal check and have saved all of them after your bank has processed them, then you will have rock solid proof of your rental history.
Chances are you may be renting from the homeowner directly. If this is the case, you will most likely need better proof of rental history than just a letter from the homeowner saying that you have paid your rent on time. A nice letter saying that you paid as agreed when you hadn't could be gotten with a nice steak dinner and bottle of wine. Do yourself a favor and make the payments with a check and save every one of them to show the underwriter when you apply for a mortgage.
Pay Your Rent and Credit Accounts On Time Following Foreclosure
Along with paying your rent with checks, do not be late. Missed rent payments, or late rent payments are the kiss of death for getting a mortgage following a foreclosure or bankruptcy. Remember, you have to prove to the new mortgage lender that you are worthy of getting a mortgage again. If you have not kept up with your end of the lease agreement for the home you are renting, or for any of your credit for that matter, following a foreclosure your chances of getting a mortgage are very low. If you have to, put all of your credit account payments on auto pay so you do not miss any.
If you make your rent payments on time and as agreed coming out of foreclosure then you have a strong chance of getting a mortgage. You will need to wait 3 years, but this should give you plenty of time to get your credit cleaned up and put some cash in the bank. Be patient, do the right things and you'll be a homeowner again.
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