Losing your home to foreclosure is indeed unfortunate. Still, it does not mean that you will be renting out a property for the rest of your life. Although it will take longer than before, you can still get a mortgage with an acceptable interest rate as long as you are patient.
Fannie Mae has recently changed the number of years borrowers will have to wait before they can take out a new mortgage. It is now five years, instead of four. According to the government agency, this change in policy was made in order to weed out those borrowers who were quite irresponsible in their handling of their mortgages.
On the other hand, borrowers with a foreclosure record on their credit history can be approved for a new mortgage after three years from the foreclosure sale if they were able to explain and prove that the reason for the foreclosure is beyond their control. These include illness, death in the family and unemployment.
In order to increase your chances of getting approved for a new mortgage, after the prescribed waiting period is over, you should immediately practice good paying habits. Try to avoid late payments on your credit card bills and utilities in order to avoid losing valuable credit points.
During the waiting period, you should work hard to make sure that your finances are in order. If the problem lies with the way you manage your budget, you must make the necessary adjustments. You can also start saving up for a bigger down payment in order to reduce the amount of mortgage you will have to pay each month.
Ironically, you might want to consider repossessed properties when the time to buy a home comes. They are certainly cheaper than the other homes for sale, even with the repair costs. In addition, you will also enjoy a large selection of foreclosure homes to choose from.
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