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Buying a Home After a Foreclosure
Buying a home after a foreclosure is not an impossible task. With some
careful planning and some savvy shopping, you can secure a mortgage loan
even with a foreclosure in your credit history.
Wait At Least Two Years
Mortgage lenders focus on the
last three years of your credit history when they consider
your mortgage application. It is best to wait at least two
years after a foreclosure. However, if you have a large down
payment or a fairly good credit score, lenders sometimes make
exceptions.
Save A Down Payment
One way to improve the terms of
a mortgage loan is to have a down payment. A credit score of
600 or lower usually means you will need a down payment between
5% and 20%. Larger down payments will mean better rates. As
a bonus, you can avoid PMI with a down payment of 20%.
Create Good Credit
A foreclosure doesn’t mean an
end to your dreams of home ownership. After a foreclosure,
take steps to build back a good credit score with regular payments
on your bills and loans. It is also better to make small regular
payments on credit cards than hit and miss with payments. You
want to show lenders that you are dependable with paying your
bills.
If you do run into trouble, call
the billing company and make arrangements before they report
you to the credit reporting agencies. Billing companies want
to see their money and are often willing work out an arrangement.
Shop Around
When you are ready to look for
a mortgage, compare prices online. Sub prime lenders offer
loans to people with bad credit, but they don’t all charge
the same rate. Make sure the lending company you pick offers
competitive rates and fees. Mortgage websites now offer quotes
from several companies, so you can pick the best financing
offer.
Asking for quotes online doesn’t
commit you to accepting an offer. So if you are hesitant about
taking on a mortgage, online websites can give you an idea
of what to expect.
Mortgage websites can also process
your loan application online faster than a traditional mortgage
office. Once you have submitted the needed information online,
the paperwork will be sent out to you for final approval and
your signature.
Here are our recommended sources for bad credit mortgage lenders online:
Top Recommended Mtg Lenders
For People With Credit Problems
-Updated 2008-:
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