How to Purchase a Home After a Foreclosure

Video Transcript

"Hi, this is Matt McKillen with Innovative Financial Group. The question posed to me today, is how do you purchase a home after you've had a foreclosure. There's different guidelines for that. There's conventional loans, which is the Fannie Mae, Freddi Mac type loan. And then there's FHA, which is the Federal Housing Authority, or a government back loan. Generally with Fannie Mae, or Freddi Mac, you can purchase a home, after you've had a foreclosure, but they generally like to see a seasoning of at least four years since the foreclosure sale. And then at that time, you qualify for the loan, just like you would on your first property. You have to prove your income, there may be down payment requirement involved, which you have to prove you have the assets for that. And then hopefully over the term of the four years, you've been working on rebuilding your credit, and your scores go up. FHA, the government back loan, their guidelines are a bit looser. Even though they offer the same, if not better interest rates. I believe that the foreclosure wait period on that is three years. So the best thing you can do, if you've had a foreclosure, and you're looking forward to purchasing another home down the road, is work on rebuilding your credit. Get some credit cards, or some secured credit cards, to work on reporting a score, and save money. Try and keep stable on your job. And you can achieve the dream of owning a home again, probably within about three, to four years. Again, my name is Matt McKillen, and I'm with Innovative Financial Group."