{"id":3916,"date":"2020-08-19T15:56:31","date_gmt":"2020-08-19T21:56:31","guid":{"rendered":"https:\/\/shieldagency.com\/?p=3916"},"modified":"2025-01-30T17:10:08","modified_gmt":"2025-01-30T23:10:08","slug":"how-to-get-a-mortgage-after-a-foreclosure","status":"publish","type":"post","link":"https:\/\/www.shieldagency.com\/blog\/how-to-get-a-mortgage-after-a-foreclosure\/","title":{"rendered":"How to get a mortgage after a foreclosure"},"content":{"rendered":"\n<p><a href=\"https:\/\/www.shieldagency.com\/blog\/\" target=\"_blank\" rel=\"noopener\" title=\"Shield Insurance Blog\">Shield Insurance Blog<\/a> | Mortgage after a foreclosure | <a href=\"mailto:ContactUs@ShieldAgency.com\" title=\"Contact our office \">Contact our office <\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to get a mortgage after a foreclosure<\/h2>\n\n\n\n<p>A <a href=\"https:\/\/www.bankrate.com\/mortgages\/what-is-a-foreclosure\/\">foreclosure<\/a>&nbsp;can make you feel like your world is collapsing. Jilyn Crawford knows the feeling. She legally fought against a pending foreclosure on her family home for more than a decade because of a bank\u2019s error.<\/p>\n\n\n\n<p>\u201cIt feels like you are being buried alive,\u201d says Crawford, senior loan officer and sales manager at American Family Funding in Santa Clarita, California.<\/p>\n\n\n\n<p>Her experience prompted a career change, going from real estate agent to loan officer. She didn\u2019t want others to go through what she had gone through and wanted to give people a chance to buy another house even after a foreclosure<\/p>\n\n\n\n<p>\u201cThere is hope, and life does start again,\u201d Crawford says.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How long after a foreclosure can you buy a house?<\/h2>\n\n\n\n<p>Generally, borrowers whose homes have been foreclosed must undergo a waiting period before anyone will lend them money for another&nbsp;<a href=\"https:\/\/www.bankrate.com\/mortgages\/30-year-mortgage-rates\/\">mortgage<\/a>. Extenuating circumstances for certain types of loans, however, can actually shorten the time frame.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.bankrate.com\/mortgages\/mortgage-rates\/\">Conventional loan<\/a>&nbsp;\u2013 After a foreclosure, it can take you seven years to get a Fannie Mae or Freddie Mac conventional loan, but sometimes shorter or longer, depending on the lender. However, this can be shortened to a mere three years if certain circumstances led to the foreclosure, such as a loss of employment, medical issue, or incorrect information on your credit report, Crawford says.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.bankrate.com\/mortgages\/fha-loan-rates\/\">FHA loan<\/a>&nbsp;\u2013 You\u2019ll have to wait three years to get a loan backed by the Federal Housing Administration (FHA), which begins when the foreclosure case ends, generally when the foreclosed home is sold. Like applying for a conventional loan, if you can prove circumstances beyond your control caused the foreclosure, you may be able to request a shorter waiting period.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.bankrate.com\/mortgages\/va-loan-rates\/\">VA loan<\/a>&nbsp;\u2013 For veterans and those still serving in the military, the Department of Veterans Affairs (VA) requires only two years between a foreclosure and seeking a new loan. Note that if you qualify for a VA loan, you\u2019ll get a home loan entitlement, which is the maximum amount the VA guarantees it\u2019ll pay the lender in case of default. \u201cI\u2019ve had veterans lose part of their entitlement in a foreclosure, but they still have entitlement left. It\u2019s all about the foreclosed amount,\u201d Crawford explains.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.bankrate.com\/mortgages\/what-is-a-usda-loan\/\">USDA loan<\/a>&nbsp;\u2013 Available in largely rural areas, USDA loans have a waiting period of three years to qualify if you have a foreclosure in your credit history, Crawford says.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.bankrate.com\/mortgages\/non-qualifying-mortgages-qm\/\">Non-qualified mortgage<\/a>&nbsp;\u2013 With a non-qualified mortgage (non-QM), or a loan that doesn\u2019t meet government standards, you could possibly get another loan right after your foreclosure, Crawford says. Note that Non-QM loans have more expensive fees, higher interest rates, and also different qualifications than qualified mortgages (QM).<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">How to get a mortgage after a foreclosure<\/h2>\n\n\n\n<p>Despite the foreclosure, you can own a home again with patience and strong financial habits. Before you attempt to buy, do the following:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. Check your credit report<\/h3>\n\n\n\n<p>Get a free copy of your credit report from&nbsp;<a href=\"http:\/\/www.annualcreditreport.com\/\">AnnualCreditReport.com<\/a>, and look through it for any mistakes or payments you thought were taken care of, such as a bill you thought your health insurance company paid but instead went to a collection agency.<\/p>\n\n\n\n<p>\u201cThis happens all the time,\u201d Crawford says. \u201cIt happened to me. You don\u2019t even know they are there.\u201d<\/p>\n\n\n\n<p>If you believe there is an error on your credit report, contact the credit reporting agency (either Equifax, Experian, or TransUnion), and be sure to have supporting documents to make your case. You can contact any of the reporting agencies by phone, online, or by mail to dispute incorrect information on your report.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Focus on improving your credit score<\/h3>\n\n\n\n<p>Depending on what your credit score was before the foreclosure, it\u2019s likely to have dropped between 80 and 160 points afterward, according to Crawford. <\/p>\n\n\n\n<p>To help&nbsp;<a href=\"https:\/\/www.bankrate.com\/personal-finance\/credit\/how-to-improve-your-credit-score\/\">improve your score<\/a>, strive to pay every bill on time \u2014 late payments are very hard to get off your credit report, Crawford says. Most creditors will give you a one-time erase, so you can try asking for it if late payments aren\u2019t a regular habit. Set up your bills on automatic payment, if possible, to avoid forgetting to pay them. If you have any credit cards, try to pay more than the minimum balance due, as well.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Re-establish income<\/h3>\n\n\n\n<p>Lenders generally like to see consistency in employment and income, so if you lost your job but are able to work, make it a priority to find another one \u2014 ideally, one with some stability.<\/p>\n\n\n\n<p>Note that your new employer may do a credit check, which will contain information about the foreclosure. While generally, that shouldn\u2019t have an impact on your prospects, it could if you\u2019re a candidate for a role that deals directly with money. In all cases, it\u2019s best to be forthcoming and honest about how you\u2019re taking steps to move forward.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4. Save if you can<\/h3>\n\n\n\n<p>To qualify for another mortgage, you\u2019ll need funds to demonstrate to the lender that you\u2019re able to repay the loan even if emergency expenses arise.<\/p>\n\n\n\n<p>This can be hard, Crawford says, but if you can, cut back on little things like buying Starbucks, and look for ways to save, such as changing your auto insurance or cell phone plan or dropping your digital or cable television subscription.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">5. Find a lender based on your needs and situation<\/h3>\n\n\n\n<p>Seek out a lender familiar with your situation, or one with several programs to choose from that can fit what you need, Crawford recommends. For instance, if you\u2019re looking for a VA loan, avoid a lender with limited VA loan experience.<\/p>\n\n\n\n<p>\u201cAll lenders are fishing in the same pond. We are getting our loans from the same sources,\u201d Crawford says. \u201cThe difference is in the loan officer, and the knowledge that officer has.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What to consider before buying a home with a new mortgage after a foreclosure<\/h2>\n\n\n\n<p>Before jumping to apply for another mortgage when you\u2019re able, check-in with yourself and your finances. Do you feel ready to take on the responsibility of homeownership again? Think about the costs that come with owning a home, such as repairs and upkeep, in addition to the monthly mortgage payment.<\/p>\n\n\n\n<p>\u201cYou need to examine what the market looks like at that time and will a lender work with you,\u201d adds Crawford.<\/p>\n\n\n\n<p>Overall, assess whether having your own home again is the best financial move for you. Sometimes renting for a little longer can help you improve your credit, pay down your debt and build a better financial future.<br><em>Featured image by<\/em><em>&nbsp;South_agency of Getty Images.<\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Learn more about getting a Mortgage after a foreclosure<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.bankrate.com\/mortgages\/how-to-get-a-mortgage-after-bankruptcy\/\">Getting a mortgage after bankruptcy: What to know<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.bankrate.com\/mortgages\/life-after-foreclosure\/\">Life after foreclosure: Advice for becoming a homeowner again<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.bankrate.com\/mortgages\/feds-extend-foreclosure-relief\/\">Mortgage relief: Feds extend foreclosure moratorium<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>How to get a mortgage after a foreclosure given xtenuating circumstances for certain types of loans, however, can actually shorten the time frame.<\/p>\n","protected":false},"author":2,"featured_media":14807,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[342,2],"tags":[729,563,222,725,726,4,727,77,728,724,223,585,730],"class_list":["post-3916","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home-insurance","category-shield-blog","tag-bank","tag-bankruptcy","tag-bankruptsy","tag-credit-report","tag-credit-score","tag-home-insurance","tag-income","tag-insurance","tag-lender","tag-loan","tag-money-management","tag-mortgage","tag-new-mortgage"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/3916","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/comments?post=3916"}],"version-history":[{"count":6,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/3916\/revisions"}],"predecessor-version":[{"id":14808,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/3916\/revisions\/14808"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/media\/14807"}],"wp:attachment":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/media?parent=3916"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/categories?post=3916"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/tags?post=3916"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}