In the wake of the foreclosure crisis, secondary-mortgage market leaders Fannie Mae and Freddie Mac instituted a requirement to make homeowners who had been foreclosed on wait five years before being able to qualify for another mortgage. You’re almost at four years, so in another year you might qualify.
You might qualify sooner with an FHA loan, especially if you purchase a home that was foreclosed on by the Federal Housing Administration. You can shop for these “HUD homes” at HudHomeStore.com.
Get ready by pulling a copy of your credit history from each of the three credit reporting bureaus, Equifax, Experian and TransUnion. You can do this at their Web sites. You and your spouse are each entitled to one free credit report from each credit-reporting bureau once a year through AnnualCreditReport.com. Although your credit report is free, you’ll have to pay about $9 for a copy of your credit score.
Although it’s been four years since your foreclosure, you might find your credit history isn’t quite repaired yet. If your credit score is hovering in the 500 range, it will be tough for you to qualify for any loan. Once your credit score rises above 620, you’ll have a better chance, although you will still be considered a subprime borrower.
