How To Buy A Home After Foreclosure
Even if you foreclosed on your previous home, why settle for renting an apartment and paying towards someone else's financial future when you can learn how to buy a home after foreclosure? It will take some initial research, planning and discipline, but a foreclosure doesn't have to prevent you from purchasing your next home.
To learn how to buy a home after foreclosure you will need:
- Credit report
- List of mortgage lenders
- Repair your damaged credit. You will want want to pull that free annual credit report that we are all entitled to, find out exactly what your credit score is, and make every effort to pull your score up. Your foreclosure will remain on your credit report for a period of seven years, but that doesn't mean that you have to wait that long to buy a house. The first year after your foreclosure will be fairly tough to get a mortgage loan, so use that time to pay off old creditors, or open a new credit card account and make the payments each month on time. This will help to improve your image as a credit risk. By the second year after your foreclosure, hopefully your score should be in the 600's, getting your potential mortgage loan's interest quotes a few few points lower. And, if you are willing to wait at least two years after your foreclosure took place, you may be fairly close to being entitled to average interest rates again.
- Seek a mortgage loan. By using an online mortgage calculator, you can easily determine what your monthly payments will be. All you have to do is type in a few numbers, including the home's value, loan amount, interest rate, loan term, start date, property tax and PMI (private mortgage insurance) percentage, and the mortgage calculator does the rest.
- Find your financing. Don't be too eager to take the first offer you find. Shop around for the best rates. There are mortgage broker sites that may even allow you to compare multiple lenders' rates at the same time.
- Make your mortgage final. Rates do change daily on mortgage loans, so lock into your chosen financing plan immediately. Now you can forget that your foreclosure ever happened, and welcome yourself back to the wonderful world of homeowners.