NerdWallet.com article, there are a few important tips. As an example, a couple in the article lost a house in 2011 due to job layoff, and was able to buy a new house in 2015.
First, you no longer need to wait as long after bankruptcy. Now, Fannie Mae only requires a two-year waiting period after a short sale or deed in lieu of foreclosure (pre-foreclosure resolution), or three-years after a full foreclosure. Second, if you create better money habits, such as saving more money for a down payment, that will help tremendously, by showing the lender that you have changed your spending habits positively. Third, be sure that your credit is getting better, by paying off whatever high interest loans you can, and making on-time payments on all of your debts. Fourth, do not fall for high interest predatory loans. What are those? Lenders with teaser rates that go up quickly, or, specials, or rent-to-own deals. If your real estate broker recommends certain lenders, be sure to shop around for the best rates.
If you have questions about how to set yourself up to buy a house again, talk to a housing counselor, or to an attorney. Especially if you have had debt problems or foreclosure before, it’s important to take it slow, ask questions, and be careful.
Many of our clients have gone through foreclosure and bankruptcy, and many have been able to bounce back and become homeowners again. Call us; we can point you in the right direction.
Daniel J. Winter
Offices in Chicago, Gurnee, Oak Lawn, and Skokie, Illinois.