Financial difficulties over the past months, or even years, have led to many homeowners losing their homes through foreclosure. The inability of certain homeowners to meet their monthly mortgage payments has led to many having to turn to alternative living arrangements, like renting, despite the fact that home modifications and other mortgage assistance plans are in place.
Some homeowners have been unable to take advantage of these mortgage assistance plans due to their financial position, but homeowners often wonder how long they must wait before they can reenter the housing market if they have faced foreclosure. There are many reports which indicate a foreclosure will stay on an individual’s credit report for around seven years, but sources like the FHA, Freddie Mac, or Fannie Mae often say that a homeowner may be able to jump back into the housing market in as little as three years.
Obviously, there are factors which will weigh into the period of time which a homeowner must wait before they can begin the process of homeownership once again, but there are some individuals who having faced foreclosure are preparing to purchase a home again in the near future. Cases where homeowners have lost their home to foreclosure because of cutbacks at their job and unemployment may be seen more favorably by a lender than if a homeowner simply walked away from their mortgage, which has been the case with strategic defaulting due to underwater mortgages.
Homeowners who have lost their home may have also suffered a setback in their credit life, which led to a lower credit score, but during the time where a homeowner must wait before they can qualify for a mortgage once again, this time has often been used by homeowners to begin repairing their credit score or simply saving money. Obviously, if a homeowner’s credit score took a large hit because of financial strains in their life, simply going through the process of building one’s credit back to a stronger level will take time, but it can be beneficial when a homeowner plans to reenter the housing market.
Understandably, homeowners who have faced foreclosure may be able to enter the housing market once again sooner rather than later, but making sure that one is on a firm financial ground and is in a situation where they can get an affordable mortgage, which will require repairing any credit damage that was done, is something that many financial advisers often suggest individuals pursue while waiting for the opportunity to purchase a home once again.