Ways to Get a Mortgage Loan After Foreclosure

Do you think it's feasible to get a mortgage and buy a home after foreclosure? Nowadays, you can't watch CNN or any news program without getting an update on the declining housing market. The foreclosure rate continues to increase each month, and numerous homeowners have started to experience payment shock as the monthly note on their adjustable rate and interest only home loans double, or triple.

There used to be a time when homeowners could sell their houses and move into a less expensive home if needed. Unfortunately, affordable housing no longer exist is some parts of the country, and the days of selling your home in a few weeks are gone. Today, expect your house to sit on the market for six months or longer. This isn't a problem for people who can maintain their mortgage payment. However, if you're on the brink of foreclosure and need a quick fix, a slow housing market can be the start of a financial down spiral.

But it doesn't have to end there. Foreclosures aren't pretty. Let's be real: they're down right embarrassing. Your credit score will take a serious hit, and most lenders won't touch you with a ten feet pole. But there are ways to bounce back and repair your credit. In fact, there are ways to get a home loan after a foreclosure. You probably won't qualify for a new home loan in the next few weeks or months. But give it some time, and in the meantime, do everything in your power to improve your low score.

Step #1:

Grieve, but don't obsess. It's normal to feel upset, angry, shameful, etc. But don't let it get you too down. Yeah, a few people will judge you, and some will talk behind your back. Rather than hide under a rock and wait for the dust to settle, design a plan to get your finances back on track.

Credit repair after foreclosure is essential. And the sooner you start to rebuild your credit history, the sooner you can begin looking for a new mortgage loan. Although a foreclosure can knock as much as 200 points off your credit score, endeavor to maintain your current credit account. Pay your bills on time and keep your debts low. It can take anywhere from one to two years to recover from serious credit mishap.

Step #2

Even if you improve your credit score, the foreclosure remains on your credit report for seven to ten years. This can be a problem.

Some mortgage lenders are funny, and despite your best efforts to improve your situation, they won't give you a loan. But, there are ways to sway them in your direction - bring cash to the table.

Your loan options are few after a foreclosure. And one of the best ways to qualify for a home loan is to save money for your down payment and closing costs. Buying points can even get you a lower interest rate.

Step #3

Mortgage lenders vary. You can present your application and financial history to two different lenders, and receive two entirely different quotes. Be a savvy shopper and shop around. The right quote can save you thousands on interest payments, and keep your monthly payments affordable.