This question was recently asked of me and after answering it one on one I figured it would make a good blog post as it is a question many wonder, but few ask.
Losing your home to foreclosure or selling your home as a “short sale” can surely be a blow to your ego and pride. This is why many people don’t ask this question because they don’t want to admit they ran into trouble when in fact, many more people had the same problem.
The answer to the question is not an easy one. Some will tell you that you have to wait 7 or 10 years and even then you will be high risk (have to pay a high interest rate), but this is not always the case. The fact is that some can buy again in just 3 years after a foreclosure or a short sale.
How can you tell how long you will have to wait? It all depends in the steps you take after your foreclosure or short sale.
There are steps you can take to shorten the time you have to wait until you can buy again. One of those steps is saving money. When you are ready to buy again, you might consider going to an FHA loan. FHA requires less money down than a Conventional loan, but still requires as little as 3.5% down. This means that if you buy a $100,000 house, your down payment will be $3,500. You will also have to pay closing costs which can still be a little costly. The good thing with FHA is that you can ask the seller to help pay some of your closing costs so that helps a little. FHA is a good way to go when you are back on your feet.
Another step you can take to buy again sooner is to fix your credit. Rebuild your credit by making monthly payments on time. If you have credit cards, pay them down, but not to a zero balance. Your credit score jumps up more when you carry a a slight balance instead of having everything paid completely off.
While this sounds easy, rebuilding your credit can be a bit more complex. If you are unsure of all the steps you have to take, Century 21 Gold has agents that will help you rebuild your credit – give us a call today!
I hope this information sheds some light on the question for you. If you have any specific questions or comments, please feel free to post them here, or contact us to help you in reaching your goals in 2012 and beyond!
