Buying A Home After A Foreclosure
Author: Carrie Reeder
Buying a home after a foreclosure is not an impossible task.
With some careful planning and some savvy shopping, you can
secure a mortgage loan even with a foreclosure in your credit
history.
Wait At Least Two Years
Mortgage lenders focus on the last three years of your credit
history when they consider your mortgage application. It is
best to wait at least two years after a foreclosure. However,
if you have a large down payment or a fairly good credit score,
lenders sometimes make exceptions.
Save A Down Payment
One way to improve the terms of a mortgage loan is to have a
down payment. A credit score of 600 or lower usually means you
will need a down payment between 5% and 20%. Larger down
payments will mean better rates. As a bonus, you can avoid PMI
with a down payment of 20%.
Create Good Credit
A foreclosure doesn’t mean an end to your dreams of home
ownership. After a foreclosure, take steps to build back a good
credit score with regular payments on your bills and loans. It
is also better to make small regular payments on credit cards
than hit and miss with payments. You want to show lenders that
you are dependable with paying your bills.
If you do run into trouble, call the billing company and make
arrangements before they report you to the credit reporting
agencies. Billing companies want to see their money and are
often willing work out an arrangement.
Shop Around
When you are ready to look for a mortgage, compare prices
online. Sub prime lenders offer loans to people with bad
credit, but they don’t all charge the same rate. Make sure the
lending company you pick offers competitive rates and fees.
Mortgage websites now offer quotes from several companies, so
you can pick the best financing offer.
Asking for quotes online doesn’t commit you to accepting an
offer. So if you are hesitant about taking on a mortgage,
online websites can give you an idea of what to expect.
Mortgage websites can also process your loan application online
faster than a traditional mortgage office. Once you have
submitted the needed information online, the paperwork will be
sent out to you for final approval and your signature.
About The Author: To see a list of recommended bad credit
mortgage loan companies online, visit this page:
www.abcloanguide.com/lessthanperfectcredit.shtml . Carrie
Reeder is the owner of ABC Loan Guide. It is an informational
loan website, with informative articles and the latest finance
news.
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