It's hard to obtain a mortgage loan after you've gone through a foreclosure on a house. Lenders will view you as a critical danger to default on your new mortgage loan if you've already done this once, and many will not be willing to give you money consequently. This doesn't mean lenders obtained 't ever be willing to provide you mortgage cash following a foreclosure. You'll have to take certain measures, though, to win their faith.
Apply for a new mortgage loan at the right time. A housing foreclosure stays on your credit report for seven decades. As time goes on, though, the effects of the foreclosure lessens. You'll have a much greater chance of qualifying for a new mortgage loan if you’re able to wait three or more years following your foreclosure to apply for this.
Pay your bills on time every month following your foreclosure. Pay down your revolving credit card debt, too. This can help boost your credit score, the three-digit number that mortgage lenders rely on to determine if they will provide you a home loan and at what interest rate. The surest way to reconstruct a damaged score is to pay off your bills and lower your debt.
Compose a fiscal hardship letter which explains why you lost your previous house to foreclosure. You might have lost your job or suffered a fall in annual earnings. You might have gone through an expensive injury. Explain in your hardship letter your fiscal position has changed, and why you will not fall into foreclosure . You might, for instance, have built up an emergency fund to pay eight months of living expenses in case you should ever lose your work again.
Make copies of the fiscal papers that verify your present financial situation. These may include your two most recent paychecks, savings and checking account statements, and most recent federal income tax return. Also make duplicates of your other loan bills –pupil, automobile or private –and your present credit card invoices. You'll use these to prove to a lender that you’re now financially stable.
Telephone several mortgage lenders to ask about applying for a mortgage loan even though you'Id had a foreclosure in your past. Ask these lenders if they ever work with borrowers who still have a foreclosure within their own past. Make certain that you call lenders from throughout the nation; you aren’t limited to working with lenders at the San Francisco region.
Send your lender the duplicates of your financial paperwork and your hardship correspondence.
Complete your creditor 's Uniform Residential Loan Program. This form, required for mortgages, can ask you about your current income and employment status. It will also ask you about any previous foreclosures or bankruptcies. Answer the questions truthfully and return the application to your lender.
Signal the closing documents on your loan when your lender approves your application and should you accept the interest rates it quotes you. You will most probably have to pay higher interest rates because of the foreclosure on your own record. Just ensure the prices aren't so large you're not comfortable paying them.