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Is buying a home after foreclosure possible?
Foreclosure is devastating. Life can get tough and we sometimes lose our grip on being able to pay our bills. Perhaps you lost your job, or got injured and were not able to work. Whatever the situation, you have worked hard and you are ready to start over and get another home. It is possible to consider buying a home after foreclosure. Your options become lesser. But, it is not the end to the dream of owning a home either.
How foreclosure affects you:
When you go through foreclosure it essentially destroys your credit score. So much so, that you are often no longer eligible to get a home loan. Most, if not all banks will turn you down if you have gone through foreclosure. You may not be eligible for at least seven years or longer (don’t give up yet, read on!). You could wait this long to buy another home but it is not a guarantee that you will become eligible after this time.
Credit bureaus keep the mark on your credit report for seven years. Once the seven year mark comes up they send a letter to debtee to inform of the mark on the credit report of the said debtor. If the debtee doesn’t reply to renew this mark it is then removed. If the debtee does reply, the mark will stay on your report for another seven years. By law, credit bureaus have to do this.
Foreclosure is not the end, 3 years instead of 7!
Fannie Mae has made some concessions recently. If your foreclosure was the result of extenuating circumstances then you could be in luck. The limit has been changed in special cases from 7 years down to just 3. Buying a home after foreclosure might be possible if you were foreclosed on because of a divorce, job loss, change in circumstances or a tragedy.
Yes, it is possible buying a home after foreclosure. You just need to weigh these options and find which works best for you. You just need to take the time to look around, save some money, work on your goals, repair your credit as best you can for other major purchases. Have patience. Perhaps see a financial adviser to help you to ease the dent of any possible debt and get yourself back on track and prevent any more devastating financial hardships. Home ownership is still possible.