If you previously went through a bankruptcy and foreclosure, it is possible to buy a house again. There are particular criteria that you must satisfy. Below, we provide an overview of how quickly you can buy a house following foreclosure and bankruptcy in MA.
Home Buying Following Foreclosure
A foreclosure stems from defaulting on a home loan. Naturally, you should not be in a position to immediately buy another house. A new lender will not believe that you will stay up to date with another home loan. For conventional home loans, there is a waiting period of seven years before you can be issued another home loan. FHA home loans allow a lower 2-3 year time frame. There are also some programs, such as the FHA Back to Work Program that requires just a one year wait period.
Note that this time frame is only one of several underwriting qualification rules. During that period of time, it is important that you are really conscientious about your credit. Examples are making payments on time, not keeping high balances on your cards, avoiding collections, etc. Most lenders require certain credit scores for approval and the foreclosure probably lowered your score dramatically. These will both prove your ability to honor credit granted and improve your score.
Buy A House Following Foreclosure and Bankruptcy
If you went through foreclosure AND you filed for bankruptcy, there are 2 different waiting periods. Usually, the later of the two applies. However, if the foreclosure was added to the discharged bankruptcy (and the new lender is able to confirm that), then you may take advantage of a shortened timeframe. For conventional home loans, that means four years rather than seven.
Determining How Quickly You Can Buy A House Following Foreclosure And Bankruptcy In MA
All of this can be a bit confusing. Contact a mortgage broker to determine which category you fall into. If you are beyond the waiting period, the mortgage broker can complete a pre-approval. If you do not qualify right now, your mortgage broker may provide suggestions for improving your credit.
What you should know right now is that it is possible to buy a house even if you have experienced foreclosure and bankruptcy. Wait periods apply and will vary based on the type of loan. Additionally, there are special programs that will shorten that wait period. Qualifications and features will change over the years, so your mortgage broker is usually your best resource for current guidelines.