Home-Buying After Foreclosure or Bankruptcy

- Be absolute certain your credit has been rebuilt by paying all your bills on time and in full. Check your credit score, and keep an eye on it.  Aiming for a minimum score of 580 improves your chances of qualifying for a home loan. 

- Get every penny you can into savings! 

- Consider taking a course in financial management.  Not only does this help you become more financially stable, it shows a lender that you’re serious about it. 

- If your last home went into foreclosure, there are waiting periods for applying for a mortgage: three years for FHA loans, seven years for Fannie Mae/Freddie Mac loans, two years for Veterans Affairs loans, three years for USDA loans, and other lenders have different waiting periods. 

- Buying a home after bankruptcy depends on what type of bankruptcy was filed, so there are different factors when it comes to each situation. 

- If you have experienced a short sale with your last home, depending on the lender, the waiting period to apply for a mortgage is two-seven years. 

- Some lenders may ask you to write a letter explaining the circumstances for the foreclosure or short sale, as well as what you learned during the process.   

- Extenuating circumstances that caused a foreclosure or bankruptcy, such as a major illness or job loss can make a difference in how long you must wait to apply for a mortgage, depending on the lender.  Be prepared with any paperwork that shows your loss of income or increase of debt.