Site Logo

After foreclosure, what are some tips for returning to homeownership?

Published 12:38 pm Thursday, October 22, 2015

During the Great Recession, nearly 9.3 million homeowners underwent a foreclosure, deed-in-lieu of foreclosure or a short sale. Nearly a million of those former owners have likely already purchased a home, and another 1.5 million are likely to purchase over the next five years.

“In spite of the hardships they faced, these return buyers still aspire to homeownership,” said Glenda Krull, President of the Snohomish County-Camano Association of Realtors. “They still see homeownership as one of the best ways to build equity over the long term.”

Make sure your credit is clean. A homeowner who has experienced a foreclosure on a conventional loan can expect to be negatively impacted for at least seven years if the future loan will be purchased by Fannie Mae and five years if purchased by Freddie Mac. The impact is three years for a foreclosure on a FHA loan if the consumer wants to obtain subsequent financing through FHA, though that wait can be waived if the borrower qualifieds for FHA’s ‘Back to Work’ program.

Get preapproval for a mortgage. Preapproval is a written statement from a lender stating the amount of money you have been approved to take out as a loan. Having this information will help the home buying experience go much smoother.

Have a down payment ready. Many return buyers purchased their first home when little-to-no down payments were needed. Having a sizable down payment is now an important part of the home buying process.

Find a Realtor. “Most importantly, contact a Realtor in your area,” said Krull. “Realtors are the most trusted resource for real estate information and can give return buyers the advantage they need in today’s market.”

The Snohomish County-Camano Association of Realtors is “the voice for real estate in Snohomish County.” If you have questions for The Expert about Real Estate email us at info@sccar.com.