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  • Buying a home after Foreclosure or Short Sale

    March 20th, 2011

    Over the last few years we have worked with sellers who have either been foreclosed on or sellers who have sold their home as a short-sale. As time passes and these sellers begin to gain financial strength are returning as buyers that want to start planning for the purchase of their next home.

    Homeownership is possible again however it should be noted that the banking industry is suggesting that people who have been foreclosed on will have to wait seven years before qualifying for a home loan. Those who have gone through the short sale process will also likely have to wait to purchase another home but the wait time varies and will depend on the person’s fico score.

    If you have been foreclosed on or have been in a short sale situation it is essential that you work on bringing up your credit score, lowering debt and paying off bills. According to some banks, the necessary credit score needs to be in the 620 to 640 range however above 700 will result in a more favorable interest rate. This is not to say that these parameters might change between now and the time these individuals are qualified to purchase.

    Just a few years ago it was fairly easy to purchase a home with little or in some cases no down payment. This is not the case today – save and be prepared to pay a down payment. There are still down payment assistance programs but the parameters are tightened and are not available to everyone.

    The best place to begin planning for a home ownership is with your bank or financial advisor. Evaluate your finances and create a plan to boost your credit score and save.