If you previously went through a bankruptcy and foreclosure, you can still buy a property again. There are certain criteria that you must satisfy. Below, we provide an introduction to how soon you can purchase another property after foreclosure and bankruptcy in MA.
Home Buying Ability After Foreclosure
A foreclosure results from an inability to make payments on a home loan. Logically, you would not be in a position to buy another property right away. A new mortgage company will not believe that you will comply with the terms of a new home loan. For conventional home loans, there is a waiting period of 7 years (from the foreclosure date) for approval on another home loan. FHA home loans have a quicker 2-3 year time frame. There are also special programs, such as the FHA Back to Work Program that requires just a one year time frame.
The waiting period is merely one of several mortgage qualification rules. During that period of time, it is important that you demonstrate good credit behavior. This includes making prompt payments, not keeping large balances on your credit cards, avoiding collections, etc. Most lenders require minimum credit scores for underwriting approval and the foreclosure surely reduced yours significantly. Good credit practices will both demonstrate your ability to honor credit granted and elevate your score.
Purchase Another Property After Foreclosure and Bankruptcy
If your property was foreclosed AND you completed a bankruptcy, there are two applicable waiting periods. Usually, whichever waiting period is longer applies. However, if the foreclosed property was part of the discharged bankruptcy (and the mortgage company successfully certifies that), then you can take advantage of a shorter timeframe. For conventional home loans, that would be 4 years (instead of 7).
Finding Out How Soon You Can Purchase Another Property After Foreclosure And Bankruptcy In MA
All of this can be somewhat confusing. Contact a mortgage consultant to find out what specifically applies to you. If you are past the wait period, the mortgage consultant can also provide information on whether you may get approved for a home loan. If you do not meet the requirements at the moment, your mortgage consultant may recommend ways of improving your situation and get you closer to buying a property.
What you should keep in mind is that it is feasible to purchase another property even if you have gone through foreclosure and bankruptcy. Wait periods do apply and may vary depending on the type of loan you would like to use. Additionally, there are certain programs that may shorten that wait period. Criteria and options will change from time to time, so your mortgage consultant is usually your best resource for current guidelines.