It is estimated that 3.8 million properties were foreclosed on in 2010. Through June 30 of this year, foreclosure has impacted 1.2 million U.S. homeowners – “one in every 111 households” – according to a RealtyTrac report entitled, “Foreclosures Plunge in First Half Of 2011.”
Millions of families have been displaced by foreclosure but are guardedly considering the purchase of a home again. Straight answers are hard to come by on the topic. A recent article by Real Estate Attorney Scott J. Clifford sheds light on the subject. This is a recap of his article, “Buying a Home Again After Foreclosure,” posted on HousingPredictor.com on Thursday, November 3.
Five Steps Back To Homeownership:
1. Do Your Best, It Matters – During and following the default process be mindful of how actions impact credit ratings and overall financial health. The manner in which other credit obligations are managed during tough times will matter.
2. Reality Check – Have reasonable expectations about what is possible after a foreclosure.
- Lowest interest rates may be out of reach.
- Sizeable down payments may be required.
- Mortgages backed by governmental entities may require maximum waiting periods for eligibility.
3. How Long Is The Wait? – A foreclosure typically remains on a credit report for seven years, however in some cases a home can be purchased in less than seven years. Usually the range is three to five years. If the foreclosure was precipitated by extenuating circumstances such as job transfer or the death of an immediate family member, the waiting period may be shortened to as few as two years.
4. Make the Most of the Wait – Use the time to build savings, pay down debt, create a record of “on time” rental payments and honor all obligations.
5. Cash Works – Consider saving up for a sizable down payment (20-25%) or paying cash for a home. Prices are so affordable that this may be more feasible now than at any time in recent history.
With strength of purpose and the right action plan, dreams of homeownership can come true…again.
For additional information, please join us at FirstPrestonHT.com or on our Facebook and Twitter pages.