Can I Buy a House After a Foreclosure?

Can you buy a house after a Foreclosure? This is a common question among those seeking to purchase Real Estate, as many have faced Foreclosure in their past. The good news is that you indeed will be able to purchase Real Estate post Foreclosure, however, there is a waiting period and a lot of work that is generally involved in order to do so.

Can I Buy a House After a Foreclosure?

Waiting Period

The waiting period in regard to a home purchase post-foreclosure varies from lender to lender but is also loan specific. In general, you can expect the following, however, keep in mind that this is also accompanied by work to repair damaged credit which we will talk about later:

VA Loan 2 years post-foreclosure

USDA Loan 3 years post-foreclosure

FHA Loan 3 years post-foreclosure

Conventional Loan 3-7 years post-foreclosure

Credit Repair

When going through foreclosure you will always see a large drop in your credit which can limit future purchases. On average, for those with high credit scores pre-foreclosure, you can generally see your score drop 100 points, whereas those with lower scores can see a decrease of up to 160 points. You will have to show consistent payments and high effort to repair your credit prior to a lender agreeing to work with you for a new home purchase. A few ways to do so:

On-time payments, need to be a minimum of 12 consistent months, however, most lenders prefer to see 24 months of on-time payments.

Credit usage should be at or below 30% of your maximums to show responsible credit use, try to get each credit account below 30% usage prior to applying for a new home loan as it will help your approval odds.

Responsible usage is just as important as on-time payments and 30% usage amounts, and thus it is important to actually use your credit cards, but responsibly. Try using a card for just gas, or just groceries, once you’ve purchased the items, then go in and pay the card off the same day, almost as if the credit card is a debit card. This avoids interest but shows you can use and pay for your purchases responsibly which will help boost your credit score.

If you’re currently searching for a condo in Panama City Beach and are in need of a qualified listing agent to help you list and market your home or have any general questions regarding Panama City Beach Real Estate, please feel free to contact our office at any time.

Can I Buy a House After a Foreclosure?