Many of those who lose their home to foreclosure in Northern Virginia, Maryland & Washington DC, are often interested in buying a home after foreclosure as quickly as possible. While the foreclosure will stay on the former homeowners’ credit for 7-10 years, this does not mean that they won’t be able to qualify for a new home loan in a shorter period than that. However, it takes work to be able to qualify for a new home after foreclosure. The quickest way to get a mortgage after facing foreclosure is to save up 35% as a down payment. Some foreclosure lenders will loan up to 65% LTV (loan to value) of the home right after foreclosure, or while still in foreclosure. Of course, other qualifications may apply, and rates will not be great if there was a previous foreclosure involved. But from a lenders’ perspective, having a substantial amount of equity in the property will give the homeowner a new cushion to prevent them from becoming a victim to foreclosure again.

However, if the homeowner doesn’t plan on saving tens of thousands of dollars, then they will have quite a bit more work to do in order to receive a mortgage. They need to get to a point in which the foreclosure is just one small mark on an otherwise pristine credit history.

After foreclosure, it is always best to begin working on repairing the credit situation as soon as humanly possible. Get negative information removed, negotiate with creditors, dispute debts, and many other techniques can be used to raise up the consumers’ credit score by over 200 points. Getting a credit card with a small balance, using it, and almost paying it off every month is another great idea. This way, they can carry a small balance and generate some positive credit history every month.

Also, there may be a need to speak with a financial advisor to work out a budget and put together a savings plan. Building an emergency fund, so that any other financial hardship won’t have such a devastating affect, is a smart idea. This also shows a bank that there is extra money in a savings account, which will help the lender decide that the applicant now deserves a loan approval. It also shows a lender the good spending habits of the consumer after the foreclosure.

The foreclosure victim should not expect to get a 100% LTV loan for their next house. This is why it is key to save up at least some down payment plus closing costs in order to qualify for a good loan. It takes some work, but homeowners can bounce back to a pretty full recovery within a year after foreclosure, and experience all the joys and responsibilities of owning their own home, again.

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