How to Rebound After a Foreclosure

Have you or someone you know lost a home to foreclosure? You’re not alone. According to RealtyTrac’s current housing and foreclosure report, 9.1 million U.S. residential properties were seriously underwater as of the first quarter of 2014. The report also states U.S. foreclosure filings were reported on 112,498 U.S. properties in February alone. Fortunately, going through the ordeal of a foreclosure doesn’t have to deter you from owning a home again. Here’s how to rebound after a foreclosure, and ways to help preventing lighting from striking the same place twice.

You know that three to seven year waiting period lenders give you before you can purchase a home again? Use that time to clean up your credit and tie up any loose ends. A foreclosure remains on a credit report for seven years, though the negative impact will fade as time passes, according to myFICO.com, a website operated by the FICO credit-scoring company. Paying down debt, addressing any errors, and establishing a history of paying bills on time can help get your credit ready for the home buying process again.

Another great step to take in the home buying after foreclosure waiting period is to save money for a down payment. If you purchased your previous home with little to no money down, you’ll find today’s lenders have tightened their belt, sometimes requiring as much as a minimum of twenty percent for a conventional loan. Applying for an FHA loan? A Federal Housing Administration mortgage loan requires a down payment of at least 3.5 percent of the purchase price, so use this time to stock away spare cash for your next home buying endeavor.

Most importantly, take this time to really examine what caused your foreclosure in the first place. Was it an unforeseen job loss? Financial mismanagement? A tragic life event? This is the time to take the steps necessary to repair whatever past problems arose so as not to suffer the same outcome. If you have questions about purchasing a home after foreclosure or would like to be pre-approved for a new home loan, please contact the Russo Team today.

www.RussoTeam.com
602-864-1200

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