If you’ve gone through a foreclosure or narrowly escaped losing your home, it can feel like things will never be okay again. Owning a home is such an accomplishment, so it’s easy to get lost in the devastation of losing something you so dearly valued. But there is good news on the horizon. It’s completely possible to become a homeowner after a foreclosure, short sale, or deed-in-lieu, thanks to new federal guidelines that offer more leniency to those with marks on their credit reports.
Know You Do Have Options
Not too long ago, home buying regulations forced you to wait seven years after a bankruptcy or foreclosure to buy a new house, but the rules have changed. Fannie Mae allows much shorter time frames for people who can prove extenuating circumstances caused them to lose their home, like long term income loss or large medical expenses. In those cases, the waiting period after a short sale or deed in lieu is only two years, and the waiting period after a full foreclosure is three years.
The Federal Housing Administration will also provide a loan after a three year waiting period for those with a foreclosure on their records, or two years if an extenuating circumstance can be proven. If you went through a foreclosure or short sale then chances are you will need those few years to save up a sizable down payment and repair your credit score anyway, so consider those two or three years your rehabilitation period.
Make Smarter Money Moves
Accumulating debt is far too easy in today’s world, so find an expert like Dave Ramsey to teach you how to get out of debt and start saving money. When you receive a chunk of money from tax refunds, windfalls, or job bonuses, don’t spend them on a vacation or new TV; store them away for your new house!
Have a Lawyer on Your Side
A lawyer familiar with foreclosures and short sales will be able to help you during your recovery period and coach you out of your credit issues. It’s important to take advantage of the resources around you to build your new future.