If you went through bankruptcy and foreclosure in the past, it is possible to buy a new house in the future. There are important requirements that you must satisfy. In this article, we provide an overview of how soon you may buy a new house after foreclosure and bankruptcy in Florida.
Home Buying After Foreclosure
A foreclosure results from failure to make payments on a mortgage. Thus, it logically follows that you should not be able to buy another house right away. A new lender will not have much faith that you would stay current on another mortgage. For conventional mortgages, there is a waiting period of seven years (from the foreclosure date) before you can be granted another mortgage. FHA mortgages allow a quicker 2-3 year time frame. There are also specific programs, such as the FHA Back to Work Program with just a 1 year time frame.
Keep in mind that the waiting period is just one of several underwriting approval criteria. During the waiting timeframe, it is critical that you take actions to increase your FICO score. Examples are submitting on-time payments, not carrying high balances on your credit cards, not having any accounts submitted to collections, etc. Most mortgages require minimum FICO scores for approval and the foreclosure likely reduced your score significantly. These practices will both confirm your credit competence and increase your credit score.
Buy A New House After Foreclosure and Bankruptcy
If you was foreclosed AND you have a discharged bankruptcy, there are two separate waiting periods. Normally, whichever waiting period is longer applies. However, if the foreclosure was included in the discharged bankruptcy (and the new lender successfully certifies that), then you can have a shortened waiting period. For conventional mortgages, that would be 4 years (instead of 7).
Finding Out How Soon You May Buy A New House After Foreclosure And Bankruptcy In Florida
All of this information may be somewhat confusing. Contact a mortgage loan officer to find out what specifically applies to you. If you are beyond the waiting period, the mortgage loan officer will process a pre-approval. If you do not qualify at the moment, he/she may provide tips on repairing your credit and get you closer to buying a house.
In the meantime, at least you know that it is feasible to buy a new house despite going through a foreclosure and bankruptcy. Wait periods do apply and will vary based on the loan program you are applying for. Additionally, there are certain programs that will shorten that timeframe. Qualifications and options do change from time to time, so your mortgage loan officer is always your best resource for the most current guidelines.