Your Second Chance For a Mortgage After a Foreclosure
Foreclosure can be one of the most traumatic experiences of someone’s life, regardless of the reason it has a serious consequence on your credit. Most people think that their life as a homeowner is over at this point, but the truth is quite the opposite. They’re actually reducing the time it takes to get into a new home.
FHA / VA Mortgage Waiting Period
Depending on the loan options available to you, the seasoning period before you can own a new property can be as little as 2 years in an FHA or VA mortgage. Typically the waiting period of an FHA mortgage is three years after the house has transferred from your name. The same goes for VA mortgages. But if you can prove there were “extenuating circumstances” that caused to foreclosure you can renew your ownership benefit in as little as two years.
Extenuating Circumstances include:
- Job Loss
- Lay off or economic causes
- Divorce
- Illness or death of a family member
Conventional Mortgage Waiting Period
The guidelines for Conventional mortgages are a little longer, but still have the extenuating circumstances rule. Without special exceptions the rule is you must wait 7 years. If you can provide proof of why the foreclosure wasn’t directly your fault, you can Re-apply in as little as 3 years.
What To Do After Foreclosure
If you anticipate you will be buying a house again there are several things you must tend to before you are ready to apply. Because you have a foreclosure (regardless of the cause) you have a “black mark” against your record and the lenders will apply an additional level of scrutiny to your application. You can avoid this by have the proper documentation ready at the time of application.
Documents you will need:
- Last two years tax returns
- Last two years W-2’s / 1099’s for all jobs worked
- Most recent two pay stubs for each applicant
- Valid driver’s license or government issued identification
- Bankruptcy discharge paperwork (if applicable)
- The date the deed from your previous foreclosure was transferred
- Two months bank statements
- Letter of explanation outlining the cause of the foreclosure and why you don’t anticipate it will happen again.
- Any extenuating circumstance paperwork
You will have to re-establish credit as well, a foreclosure takes a heavy toll on your rating, so responsible handling of your credit card / auto / personal loan debt is a must . The lender will want to see how you’ve been handling your obligations after the foreclosure.
You will also want to have some money saved up with a retirement or liquid savings account, this shows financial responsibility and the fact you have reserves is looked upon favorably in case a reoccurrence was to happen.
If you have further questions you can always contact me directly by cell or email, or if you would like to apply you can fill out the application here
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Justin Scott
Loan Officer
NMLS 878581
- C) 920-530-4484
- O) 920-490-8823
- F) 920-490-8967
Executive Mortgage
NMLS 271650
909 . E Walnut Street
Green Bay WI 54301