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"Can I buy again after foreclosure?" This is a question I seem to get a lot. When the real estate market took a turn, people found themselves in some very difficult positions.......and we've all heard and seen the rest of the story. So past is past and now we need to figure out how to move on and repair the damage. To answer the question simply, yes, you can buy again after a foreclosure. Is it as easy as simply going and filling out another loan application? NO! It will not be an easy process but, then again, getting a loan closed right now isn't really an easy process for anyone but that's another topic for another day. Back to the topic at hand, HOW do you get another mortgage after going through a short sale or foreclosure?
Wait 7 years. NO! You don't have to wait 7 years to be able to have a home again! This may be the case for those who choose to sit and wait it out and start all over again from square one with their credit but it is not the case for those who choose to be proactive and take the proper steps to regaining and repairing their credit in a responsible manner. Here are 5 quick tips on how to achieve your dream.......the right way. :)
Two things you should know before I go. One, a lender will ask you about your foreclosure or short sale. Those who were responsible borrowers with a true hardship will be given more consideration. This would include those who lost their job and were unable to pay, needed to relocate and could not sell their home for what was owed, and those who had a death in the family, divorce or a true hardship that hindered their ability to sell. If an effort was never taken to try and sell the home or no explanation was ever given as to why the foreclosure or short sale took place, you will have a more difficult time obtaining a mortgage in the future. Credit history also plays a huge role. If your history was clean up to a certain point and that can be noted, then that will be taken in consideration.
Finally, a short sale is NOT better for your credit than a foreclosure. They both do the same damage to your credit. When you do a short sale it shows a willingness to work with the bank and helps record the fact that your home was no longer worth what you paid. However, when a lender goes to approve you for a mortgage in the future, you are just as big of a risk as someone who had a foreclosure. Short sales save the banks time and money, not your credit. If you do a short sale, be sure that you get a debt forgiveness letter from the note holder in writing at closing so you are not responsible for any debt in the future.