After Foreclosure, 3 Steps to Getting Back on the Road to Buying
Finding your dream home is truly a special and important occasion, but sometimes the amazing part doesn’t last. Just as money is the main cause of many divorces, it is also the main cause of many foreclosures. But as soon as the long and tiresome process is completed, how do you get back into it and find a new match?
Waiting and Reflecting.
Eventhough sometimes it takes up to seven years (three years under extenuating circumstances and FHA loans, and 2 years for VA loans) to buy once more after foreclosure, at least you’ll be ready and know 110 percent what you’re getting yourself into. Use the lengthy waiting period to reflect on what went wrong and to get yourself ready — financially and emotionally — for the bigger and better options that you’ll eventually have down the road. Don’t get discouraged; good things come to those who wait.
Get your credit back in shape.
Although foreclosures do usually impact your credit negatively, there are some ways that you can make you credit score stronger and make it “fit” again. Paying off debt, re-establishing credit, cutting the fat on unnecessary expenses and building your savings are all great routines to add the muscle back into your score. Staying within a specific budget and spending your money more wisely also will allow you to progress with confidence and a better understanding of how much home you can afford when the time comes to buy again.
Honesty and Communication
Learn from your mistakes in the past. Be open and honest with yourself and understand what you want and what you can afford. If the luxury downtown penthouse was what got you into problems in the first place, then why not “restart off” with a more simple place in the suburbs and have something to look forward to in the future? Remember, communication is important. When reapplying for a mortgage, discuss what happened with your lender and, most of all, explain what you did to resolve it. While it’s never fun to bring up painful parts of your past, it’s very much needed and will help you in your decision-making process. Don’t make the same mistake twice.