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When Can You Buy Huntsville Real Estate After Foreclosure?

By: Huntsville Real Estate Expert Mike Manosky On January 30, 2009

When Can You Buy Huntsville Real Estate After Foreclosure?

If you lost your Huntsville real estate because of foreclosure, you probably haven’t given up on your dream of owning a home.  You may be scared to try for financing – afraid you’ll be turned down and embarrassed in the process.  

There are few guidelines that lenders follow to determine when you’ll qualify for financing after foreclosure.  Arming yourself with this information will help you overcome your fears and qualify again for a mortgage. 

Foreclosure With Extenuating Circumstances

Generally, lenders will take into consideration any extenuating circumstances surrounding the foreclosure on your Huntsville real estate.  Was there a death or illness that prevented you from earning money to pay your mortgage?  Did you have a job transfer that came with a steep pay cut?  Were you severely injured and temporarily disabled as a result? 

You can add a memo to your credit report that explains any lapses in credit worthiness to potential lenders.  This report can be up to two hundred words and will be shown to all who look at your credit report. 

Many lenders will shorten the waiting period for documented extenuating circumstances.  The customary waiting period after a foreclosure is at least seven years.  But with documentation, the waiting period can be shortened to as little as three years. 

Deed-in-Lieu Of Foreclosure and Short Sale

You may be wondering what the waiting period for financing is for deed-in-lieu of foreclosure or in the case of a short sale.  Fortunately lenders aren’t quite as strict if you were able to avoid an actual foreclosure sale. 

The waiting period for a deed-in-lieu of foreclosure is four to seven years.  If there were special circumstances surrounding the deal, you may be able to qualify in as little as two years.  The lender may require a certain down payment or credit score as a condition of approval. 

Getting financing after a short sale is the easiest.  Generally the lender will only require a two year waiting period before they’ll approve financing.  

The good news about financing after foreclosure is that it is possible.  Your dreams of owning [city] real estate don’t have to end because you’ve had a foreclosure in your past. You may just have to be a little more patient. 

Whether you’re ready to buy your next home or simply have a question about Huntsville real estate, I’d love to help.  Give me a call today at 256-508-0211 or email me at mike@movetohuntsville.com.

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