Becoming A Homeowner Again: Mortgage Loans After Foreclosure

Many former homeowners who have experienced foreclosure may assume that they won't be approved for a mortgage loan again for a long time.

While it is usually difficult to be granted a mortgage loan before a foreclosure has come off of your credit reports, it is possible with careful research, planning, and patience. 

The following are five things you can do to maximize your chances of getting approved for a mortgage loan after you've experienced a foreclosure:

Wait until the timing is right

The biggest mistake consumers make after foreclosure is reapplying for a mortgage loan too soon. The longer you wait, the more likely it will be that a lender approves you for a home loan. 

Be content with renting for a while. This will give you some time to save up for a down payment and repair your credit. 

Raise your income level

Those with higher incomes are more attractive to lenders because they have more money coming in to put towards mortgage payments. If you can take on a second job or get a raise, you might find mortgage lenders willing to negotiate with you even if you have a fairly recent foreclosure. 

Minimize your debt load

If you owe a lot of money in credit card debt and other types of financing, you are not going to look very attractive to lenders. Combining a heavy debt load with a past foreclosure just about guarantees that you won't be approved.

Before you apply for a mortgage loan after foreclosure, you should pay off any car loan or credit card debt that you have. You're fairly likely to be approved even if you have a past foreclosure if you currently don't owe anything at all. 

Get some HUD advice

The US Department of Housing and Urban Development (HUD) offers a lot of great resources to Americans who have experienced a foreclosure. Not only can you get counseling through HUD, but you also might be able to apply for a HUD loan specially designed for consumers with foreclosures in their pasts.

Don't apply for anything else

When you apply for financing and get turned away, it leaves a negative strike on your credit report. Ideally, you should not apply for any credit cards or financing at all between the time you experience foreclosure and the time you apply again for another mortgage loan. 


You could get approved for a mortgage loan faster if you're willing to downsize and live in a less expensive home. If you've experienced a foreclosure, it's probably a good idea to look for properties that will come with a lower price tag and a smaller mortgage payment. 

For more information, look into resources offered by places like Doolin Security Savings Bank.