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Buying a new home after suffering through the trouble of a foreclosure is not uncommon. In fact, the practice takes place often enough to warrant specific guidelines, especially ones on the amount of time you must wait before purchasing another home.
FHA Loans
The Federal Housing Administration (FHA) specifies that you must wait three years from the foreclosure of your home before applying for a loan on a new home.
Fannie Mae and Freddie Mac Loans
Fannie Mae and Freddie Mac government-guaranteed loans stipulate that a borrower must wait five years from the date of foreclosure before securing a new home loan.
Conventional Lenders
According to the consumer financial website Bankrate.com, a conventional lender may require only two years between your foreclosure date and your new home loan application. This is only possible if the foreclosure was an isolated incident on the borrower's otherwise good credit history.
Credit Stipulations
Recovering from foreclosure does not exempt you from other requirements of a mortgage application. You must meet the credit, income and job stability requirements needed for a mortgage of any kind.
Misconceptions
A foreclosure does not mean a clean the slate. You must clear up any balances that may be due after the home is ultimately sold. This debt will tank your credit score, hurting your chances of obtaining another mortgage.
Source:
Bankrate.com: Life After Foreclosure
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