Prepare Now to Buy Again After Short Sale or Foreclosure

It is very important that after you go through a short sale or foreclosure, you take the necessary steps immediately to get you on a path to buying again.  At HomeForeclosureCenter.com, we lay out a custom, detailed plan for your unique situation.  Here are four key things you can do right now to shorten the timeline to buy again.

1. Get a Solid Job.

For most folks, the loss of a job or income was a major factor in your short sale or foreclosure. Lenders will be focusing on your current job and how long you have been with the company. If possible, try to get a job that is in the same line of work as your previous job.  Stay with the same job for two years, this will show the lender your income is dependable and predictable.

2. Pay Rent.

A solid rent history is going to be crucial to your future loan application.  You need to secure a lease and pay your rent on time.  Build up a good relationship with the Landlord because you will need his/her verification of rent paid on time at loan time.  Make copies of each rent check.  If you move in with family or friends, you need to pay them rent to build up your rental history.

3. Save Your Money.

Put yourself on a budget and stick to it! Most likely your bills are lower now that you are out from under your mortgage. Save that cash and put it into a savings account. You should have three to six months of reserves in the bank. Keep building this reserve so you can put down a sizable down payment when you are ready to buy again.

4. Work on Your Credit.

A short sale or foreclosure will lower your credit 150 points or more. Repairing your credit score will take time and effort. Pay down all your debt.   Keep your credit cards but pay down the debt each month. If you don’t have credit cards, you will need to get one to establish credit.  Go down to your bank and open a CD. Your bank can give you a credit card with the CD held as collateral. You will need to get your credit score up to 620 to get a decent rate when you purchase again. Your goal is to get in the high 600’s low 700’s so you can qualify for the best interest rates.

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