Description: It is not impossible to get a mortgage shortly after a foreclosure. Know how you can do it.

How soon can you qualify for a mortgage after foreclosure?

How fast you can get a mortgage after foreclosure is dependent on a number of factors. All these factors are associated with your financial situation after the loss of your home. Foreclosure makes it difficult for you to qualify for a mortgage once again as it remains on your credit report for 7 years. However, the good news is that it’s not impossible to qualify for a mortgage after foreclosure. Given below are some tips that would help you become a homeowner once again:

Start saving money

If you’ve undergone a foreclosure and want to be a homeowner once again, you should try to start saving money. Create a savings plan and work according to that. If you save sufficient money for making a big down payment, then you have better chances to qualify for a home loan once more within 5 or 6 months of the foreclosure. Many lenders or banks might ask for a down payment of 35% and if you can make it, you can qualify for a loan in spite of your bad credit.  

In fact, making a down payment of 35% is almost an impossible task for most borrowers. However, saving money should be your first priority. The bigger the amount you’re able to put forward, the cheaper your interest rate would be and the more is your likelihood to get approved for the loan. At the same time, it’s also essential that you work on bettering your credit score. 

Improve your credit

Credit repair is an essential factor when you’re looking for a mortgage after foreclosure. If you can raise your credit score, this would have a positive effect on your effort to borrow a home loan once again. You should start working on your credit as soon as possible since it can take a long time. A healthy credit score would enable you to get a reasonable interest rate on your home loan and the lenders might not ask for a huge down payment. Go through your credit report and try to eliminate any mistakes that you come across and challenge any debts that you didn’t acquire. 

Remember that if you can make a down payment of 35% straightaway, you have better chances to qualify for a mortgage after foreclosure. The lenders wouldn’t bother so much about your credit history since they’re confident that they can sell your home for an amount that is sufficient to compensate for losses they would suffer in the event of a default.