You Can Buy a Home with Foreclosure on Your Credit

There are many homeowners who have fallen victim to the unfortunate incident of home foreclosure. This is a truly traumatic experience for anyone but it doesn’t mean that life as a homeowner is no longer possible. In fact, it’s actually something that many people are finding to be easier than they thought possible. The recent economic crisis introduced the realism of foreclosure to many lives.

The overwhelming number of qualified buyers who experienced unforeseen circumstances, forced lenders to create avenues to make it possible for them to live out the dream of homeownership, even after enduring a foreclosed home loan. First, face the obvious. For those seeking more conventional loan types, such as Fannie Mae loans it’s usually required that you wait the longest period of time, which is about seven years following your foreclosed loan. Other non-conventional loans don’t require such an extensive wait period.

The wait period is actually to the advantage of the buyer with a foreclosure. This time should be utilized to repair any other negative credit issues that may have surfaced during the economic hardships that were faced. Creditors will be carefully reviewing the entire perspective of the buyer’s credit and payment history. If the foreclosure alone is the biggest concern, it will improve the chance of a home loan approval.

Many homeowners are faced with the option of ending in foreclosure or short sale and are often concerned with how it affects the credit. The biggest advantage of the short sale is that there is usually no past due amount that appears on the credit report but the foreclosure typically indicates the outstanding amount that remains on the loan. Therefore, short sales tend to be the better option when concerned with the effect it has on scoring.

Please understand that you are not the only one living in the foreclosure era nor are you the only one dramatically affected. The large number of people that have faced this crisis has forced the lending market to make amends and create avenues that will allow them to finance again if other stipulations are met. This is a good indication that you can and will become a homeowner because buying a home after a foreclosure is what many of your peers are doing right now.

It’s important that you clean your credit and maintain a stable work history while you wait. Once your wait is over, you’ll want to jump right in and with everything else in place, you’ll have the keys to your new home in no time!

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