Getting back into the real estate market after having been burned by a foreclosure isn’t easy, financially or emotionally. Realtor Hedy Goldman at SDGLN offers some tips:
Just because you’ve gone through foreclosure, bankruptcy or have a poor credit history does not mean that you cannot buy a home. People in these situations buy homes everyday. You just need to be aware and knowledgeable of the additional hoops you will have to jump through to qualify.
Homebuyers with foreclosures and bankruptcies on their records need to show a consistent history of pristine credit since the time of their foreclosure. Additional FHA requirements include: On-time bill payment on all credit accounts since the foreclosure/bankruptcy; a 640 credit score (responsible credit use is absolutely essential to gain this score 3 years out of foreclosure; a verified down payment (3.5% or higher, depending on the borrower); upfront and ongoing mortgage insurance (which protects the lender from debts in case the buyer defaults); significantly lower debt-to-income ratios (ensures the buyer has ample discretionary income to make payments long-term.
Read more at the link above.