How Long Before You Can Buy After a Foreclosure?

Foreclosures really affect your credit and ability to borrow. In fact, it could be 7-8 years before you can get a mortgage to buy a home again.

And, credit scores are only one component of a decision by an underwriter. They will also look back to see if you just walked away from the home while you could have kept paying the mortgage or if the foreclosure was the result of a job loss, health issue, etc. The reason makes a difference. If a strategic decision was made to default, it will work against you.

Underwriters will also look at your current situation – how much money you have in the bank, do you have a current job, what is your current income, etc. They compare that information with your past history – employment, payment history, etc., when assessing whether to give you a mortgage or not.

And, in the end, you will probably need a slightly bigger down payment and you may pay a higher interest rate to get the loan. However, it will be much easier for you if the default resulted from factors that were beyond your control. So, the lesson here is that while walking away may solve a current problem, a price will be paid in the future. Before you just walk away, explore all your options – refinance, loan remodification, etc.