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Tips for getting a home loan after debt troubles

The United States has been experiencing a tremendous economic recovery in recent years, and some individuals who suffered from severe debt problems during the recession may be feeling confident to try and purchase a home. Fortunately, even if you filed for bankruptcy in the recent past, there's hope. If you have filed for bankruptcy or even gone through foreclosure proceedings, this article will provide some tips to help you purchase your dream home.

First, know that bankruptcy filers or people who went through foreclosure proceedings do not have to wait seven years before getting a new home anymore. For example, after a pre-foreclosure sale, the waiting period has now been set to two years by Fannie Mae (it used to be four). Furthermore, the waiting period after a deed in lieu of foreclosure or a short sale has been set to three years (it used to be seven). In certain circumstances, some homeowners who can prove extenuating circumstances may be able to buy a new home just on year after a foreclosure.

Second, resolve your bad money habits and fix your credit. By adopting a savings strategy, would-be homeowners can start to save cash to pay for a downpayment and closing costs on their new home purchases. This can be extremely helpful in qualifying for a home loan. In addition, homebuyers can take steps to pay off their high interest credit card debt and quickly improve their credit scores, which will also help in securing a loan.

Going through bankruptcy proceedings or a home foreclosure is not the end of the world for a Washington family. Especially when families discuss their issues with a Washington debt lawyer or bankruptcy attorney, they can develop strategies to navigate their bankruptcies and (even stop in some cases) their foreclosure proceedings with the goal of returning to sound financial feet as soon as possible.

Source: Seattle Times, "5 tips to bounce back after a foreclosure or short sale," Deborah Kearns, accessed Nov. 15, 2016

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