I Lost My Home to Foreclosure. When Can I Get Another Mortgage?

The foreclosure process can be miserable for not only the homeowners who are subject to it, but for the mortgage lenders that have to initiate it. Foreclosure can be costly and expensive for lenders, so in some cases, yours might be willing to work with you to help you avoid it. That could mean modifying your mortgage to lower your monthly payments, or allowing you to put your loan into forbearance for a period, thereby pausing your payments.

But if that doesn’t work, and you fall too far behind on your mortgage payments, then you may end up subject to foreclosure — and the loss of your home. If that happens, you may need to resign yourself to renting a home. But eventually, you may be able to qualify for a home loan once again. The question is, when?

When you’re looking for a conventional mortgage

A foreclosure can deal a major blow to your credit score, so you’ll generally need to build your credit back up before applying for a mortgage again. But you should also know that a foreclosure will remain on your credit report for seven years, says Experian. And during that time, you generally will not be able to qualify for a conventional mortgage.

That said, in some cases, you may be able to whittle your waiting period down to three years if you can prove that extreme circumstances resulted in your foreclosure. For example, if you were injured or were dealing with an illness that forced you out of work, you may be able to point to that as a reason why you wound up in foreclosure, and a lender might agree to give you a new mortgage before that seven-year period is up.

There are other loan types you can look into

While you might have to wait seven years to get a conventional mortgage following a foreclosure, the waiting period for an FHA loan is shorter — usually three years. And you may not even have to wait a full three years if you can show proof of extenuating circumstances that led to foreclosure for you.

Meanwhile, if you’re eligible for a VA loan, you may be able to qualify for a mortgage two years after a foreclosure (though the same possibility of shortening that period due to proof of extreme circumstances applies here, too). VA loans also offer the benefit of not having to make a down payment on a home. However, as you might imagine, you can only qualify for one if you’re a member (current or former) of the military or the surviving spouse of someone who served in the military.

While foreclosure can be a troubling thing to go through, and it can have longer-term repercussions, the good news is that if you work to rebuild your credit, you can get another mortgage and buy another home. You may just have to wait a bit of time.

But frankly, if you’ve been through foreclosure, it means your financial situation got pretty dire. So even if there wasn’t a mandatory waiting period to get another home loan, it would probably be in your best interest to hold off anyway.