What You'll Learn
- If you lost your home due to a short sale or foreclosure, you can become a homeowner again
- You can rebuild your credit in as little as 3 years and up to 7
- It will be more difficult and more expensive to buy again before the short sale or foreclose is removed from your credit report
If you lost your home to a foreclosure, short sale or deed-in-lieu and want to be a homeowner again, the good news is you can. In as little as two years, and up to seven, from the time you lost your home, you can rebuild your credit and qualify for a new loan.
Did you know that boomerang buyers, those who lost their home during the crisis, are back in the market? In fact, it’s estimated that 7.3 million will return to the market over the next eight years.Once the foreclosure, short sale or deed-in-lieu has been removed from your credit report – as specified by the Fair Credit Reporting Laws – the same guiding principles for all homebuyers apply to you. Homeownership may be right for you if:
- You expect to live in the house for at least five years.
- Your monthly payment comfortably fits your budget.
- You have adequate reserves for unexpected emergencies.
If you are looking to buy before the foreclosure or short sale is removed from your credit report, there may be some differences for you, including:
- Your mortgage lender will pay close attention to your credit, looking carefully to determine your ability to repay your mortgage. The better your credit score, the better your chances of getting approved for a loan.
- Your lender may request that you put down a bigger down payment.
- Your lender may offer you a higher mortgage rate than the average rate.
If you lost your home due to a short sale or foreclosure, you can rebuild your credit and become a homeowner again
Many who lost their home during the housing crisis are returning to the market
The Fair Credit Reporting Laws determine how long the short sale or foreclosure will remain on your credit report