Buying a New Home after Foreclosure

Individuals and families who recently lost their homes to foreclosure usually ask when they could be eligible to buy a new home again. The bad news is that foreclosures give you, as a borrower, a bad credit score.

This means that you probably won’t be able to take loans for several years. It’s best for individuals who have recently lost to foreclosure cases to look for homes for rent while the waiting period is still not up.

Waiting period for usual foreclosures

The waiting period for ordinary foreclosures with no extenuating circumstances is five to seven years. This is expected because this means that you’ve missed out on payments for no grave life events.

If you signed a deed-in-lieu of foreclosure, your waiting time may be shortened to four years.

Waiting period for foreclosures with extenuating circumstances

If the reason for your foreclosure is caused by a death in the family, a serious illness, a job transfer, or a serious injury which affected your ability to earn enough income, the creditors will be more forgiving. Depending on the gravity of your situation, you will only need to wait for three to seven years.

If you signed a deed-in-lieu of foreclosure, your waiting period may be shortened to two years.

Waiting period after a short sale

If you tried to dodge a foreclosure and opted for a short sale instead, you will be able to buy a new home in two years.