Bad Credit - Mortgage

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It is still possible to get a mortgage even after you’ve been through a foreclosure.

Many people believe that they will never be able to get a mortgage again if they’ve lived through a foreclosure. Nothing could be further from the truth it is possible for people with bad credit and a foreclosure on their record to get a mortgage to buy a home.

The key to getting a mortgage again after a foreclosure is to understand the mortgage process and the mortgage industry.

A large down payment

The best way for a person who has a bad credit record resulting from a foreclosure to get a mortgage is to pay a large down payment. Lenders and home sellers will be willing to overlook a record of foreclosure if they get a down payment upfront. If you can get a big down payment together you should have no trouble getting a mortgage even if you’ve had a foreclosure.

One way people can increase the amount of their down payment is to take advantage of the homebuyers’ tax credits the federal government is offering. This credit makes $8,000 available to people who haven’t owned a home in over three years. The new version of the credit recently passed by Congress will make lower amounts of money available to people who own an existing home or owned a home in the last three years. This tax credit can be used in lieu of a down payment or to increase the buying power of down payment.

Talk to the realtors and mortgage lenders

The way to find out if this credit can help you is to talk to realtors and mortgage lenders. They will know how the credit works and how you can take advantage of it.

An option for those who don’t have a down payment is to look for a person selling a home who is willing to carry a mortgage. Carrying a mortgage means that the individual selling the home will be willing to guarantee the homebuyer’s mortgage.

It maybe easier to get home sellers to do this because the real estate market in most of the United States is currently very bad. People who haven’t been able to sell their homes might be more willing to carry a mortgage especially if they need to get rid of a home.

One way to find a seller who is willing to carry a mortgage is to check into homes that have been sitting unsold for months or years. Another is to try and buy a home in a less desirable neighborhood or community.

Foreclosure

Another possibility is to try and buy a foreclosure. Foreclosed homes cost lenders money so many of them are willing to make deals to unload them. Lists of foreclosed property are available online and from area realtors.

An interesting possibility is to see if you can buy back a home that was foreclosed from you. If you know the name of the company that holds the mortgage on your old home and its still empty.

You can call that company and see if you can work out a deal to move back in. If the home has been purchased by an investor they might be willing to sell it back to you.

You don’t have to let a foreclosure stop you from achieving your dreams of home ownership.