Foreclosure is hitting everyone from the poor to the wealthy these days, so it’s not unusual to see empty, vacant houses in the neighborhoods and lis pendens notices in the public records. If you’ve been hit by foreclosure, don’t feel bad, because you are definitely not the only one. While you may be a bit depressed about having to rent for a while (and let’s face it, you’ll have to), you will almost certainly want to buy a house again one day. So, you may be asking yourself, “How long after foreclosure can I purchase a home?”
The answer to how long after a foreclosure until you can purchase a home depends on what type of loan you’re trying to get. If you have twenty percent to put down on the house, you can often get a conventional mortgage right after experiencing a foreclosure, as long as all of your other financial and credit statuses look good. Of course, twenty percent is a lot, even for a home that’s only $100,000, so you may have to wait until you can save it up.
If you’re buying a house with owner financing or as a lease option, there’s no wait after a foreclosure, either, because you are not going through a bank to get your loan. You will be working directly with the owner of the home to set up your payments, and if you don’t make the payments, the owner simply takes back possession of the house. Your credit is typically not damaged (though you can’t use the owner as a reference for future housing), and your credit is not checked to get this type of financing. With more people facing foreclosure, more owners are offering this type of financing to potential buyers.
This is the tenth installment in our foreclosure series. Be sure to check back for updates…