A previous foreclosure will show up on your credit history for several years. As such, there’s significant setback in trying to get a new home, and a new mortgage to go with it.
But it’s not entirely impossible. Banks and other mortgage agencies will eventually allow you to apply for a mortgage once the waiting period is over. Imposed as a penalty, this mandatory period starts once the foreclosure process has been finalized. It varies in duration, depending on the mortgage agency or financial
institution. Some may require only three years; to others yet, it can take up to several.
It’s harder to get approved for a loan once you’ve suffered through foreclosure. But certain measures can up your credit rating to qualify for that loan once more. It takes time and diligence.
For instance, within the first few years, it’s ideal to focus on recovering from the financial and personal setbacks that led to the foreclosure.
The biggest roadblock for cash-strapped victims of foreclosure is often the deposit or downpayment on a new space to live in.
Consider cheaper living options like shared residential spaces or transient homes for the time being. Look up and choose the most ideal and affordable listings in online portals and classified ads in the paper.
Securing and maintaining a decent-paying job is also crucial. Look up any back-to-work programs in your city. Aside from providing for your needs, your job should serve to lower your debt-to-income ratio.
In line with this, once should also be conservative and responsible with finances. Refrain from maxing out your credit cards, if any.
Paying bills on time should also turn that foreclosure into an isolated incident on your credit history, given due time.