Am I likely to be approved for a second home loan after a foreclosure?

I have a foreclosure in my credit history, but my husband and I would like to attempt to purchase a new home. We are both employed. Will the foreclosure affect our chances?

asked by ElleBeeDee (85)


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It is very unlikely that you will get a home loan within 1 year of foreclosure. After that, you may get a loan by a process called manual underwriting. This process is used by 20 percent of mortgage brokers and places more importance on your ratio of income to expenses.

posted by worker29 (61)

7 votes

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A foreclosure will make it almost impossible to get a mortgage in the new 5-7 years. A better option is to rent for several years, saving up a large down payment for a home. If you have 20% down, you can get a better interest rate (not sub-prime), as well as be given better rates by the lender.

posted by tamarawilhite (12977)

6 votes

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Yes, a foreclosure will greatly reduce your chances of financing. However, a foreclosure will drop off your credit history in seven years.

posted by catch2007 (160)

3 votes

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Depending on your lender, you can secure a mortgage on a second home. However, because of your foreclosure, you will probably have a high interest rate.

posted by Halloraib (39)

3 votes

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After a foreclosure it is unlikely you will be able to get approved for a home loan right after it happens unless you have a large down payment.

posted by pfrink (77)

2 votes

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