By Carrie Reeder 

Even though buying a home after a recent foreclosure is possible, homebuyer should not apply for a mortgage blindly. Because of your current credit standing, many lenders are ready to take advantage of you. Your options are limited. Nonetheless, this does not mean you have to accept a terrible mortgage loan.

Why Does a Foreclosure Occur?

Homes are foreclosed when a homeowner is unable to repay the mortgage. On average, mortgage payments have to be three months late before a lender begins the pre-foreclosure process. If the homeowner is able to acquire funds, the lender will stop foreclosure.

Many factors contribute to a homeowner’s inability to repay a mortgage loan. For starters, living beyond one’s means will make it harder to maintain regular monthly payments. Sadly, many people fall in love with a home they cannot afford.  {continued}

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By David Zwierecki 

Rebuilding or reestablishing your credit after a foreclosure is similar to trying to rebuild your credit after a bankruptcy. Actually, the majority of people who have a home foreclosed on them, also file bankruptcy as well so that they can truly try to get a new fresh start again. The steps that you will take to rebuild your credit will be one in the same whether you have had a home foreclosed upon and/or you have filed a bankruptcy.

The first and most important thing for you to do to re-establish your credit is to review a copy of your credit report. You can obtain a free copy of your credit report once per year from each of the 3 credit bureaus by visiting annualcreditreport and following the simple instructions. By reviewing your credit you can see what exactly is reporting in your credit report. It is important to see where you are at so that you have something to work with, you have a starting point and so you know what items need to be paid, what items need to be corrected and what items are not important. Correcting your credit report is of the utmost importance, especially after a bankruptcy. It is very important to make sure all accounts are reporting with 0 balances or that they were paid through the bankruptcy.  {continued}

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