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Losing your home in the wake of significant derogatory events such as a foreclosure, short sale, or bankruptcy can be discouraging. It can also be devastating, because the home is one of your most cherished assets.

The wonderful news is that you can still get approved for a mortgage. Here are tips on how to get back on your feet after a foreclosure, short sale, or bankruptcy:

Examine your credit report

When the dust settles, ask a credit reporting agency for your credit report. Stagger your request so that you can get one every four months, making it possible for you to check for details throughout the year.

Bankruptcy filings remain on your report for up to a decade, but you don’t have to wait that long to apply for a new mortgage. You can hasten the process by ensuring that your credit report is up-to-date and accurate.

You’ll need to keep an eye out for debts that have already been paid or discharged. Creditors may not list debt that has been discharged in bankruptcy as outstanding, currently owed, late, having due balance, or converted into new debt.

Rebuild your credit

Once you know where you stand, start rebuilding your credit to convince lenders that you can handle debt. Secured credit cards, which act as collateral on your credit line, and installment loans, or loans on which you make regular monthly payments, are two ways to rebuild your credit.

When taking out an installment loan, you’ll need to make sure that you can make timely payments. Otherwise, you risk damaging your credit further.

Re-apply for a loan

There are varying waiting periods and guidelines for different loans:

  • Fannie Mae Extenuating Circumstances program– Two years after a bankruptcy, short sale, or pre-foreclosure. Extenuating circumstances refer to one-time situations beyond your control that have greatly reduced your income, such as severe illness, job loss, or debilitating accidents.
  • FHABack to Work Extenuating Circumstances program – One year after a bankruptcy has been discharged, deed transfer date, or sale date of a foreclosure. Housing counseling prior to re-applying, documentation of hardship, and proof of recovery are required.
  • VA loan– Two years after a foreclosure and a Chapter 7 bankruptcy, and one year after a Chapter 13 bankruptcy. The Department of Veteran Affairs doesn’t recognize a short sale as a derogatory event.
  • USDA loan– Three years after a foreclosure and the discharge of Chapter 7 and Chapter 13 bankruptcies. As for a short sale and deed in lieu of foreclosure, a credit rating of over 640 will likely make you eligible in about a year.


Weigh your options

Re-applying for loans have become easier since waiting periods have been reduced and mortgage guidelines have been relaxed. However, just because you qualify for a conventional loan doesn’t necessarily mean that it’s the best choice for you.

For instance, FHA loans may be the better option for borrowers with less cash available for a down payment, as are VA and USDA loans.

With these things in mind, you’ll be able to bounce back and re-apply for a loan within a reasonable time period. If you’re looking for a new home with which you can start over, you may call/text 760 622 5087 or