After going through a foreclosure, short sale or personal bankruptcy, you may doubt your ability to qualify for another mortgage in the future. After all, getting a mortgage is more difficult than it used to be, even for those who never experienced one of these circumstances. If you've had a foreclosure, will you ever be able to buy another home in Delaware?

In a word - yes! The housing market decline affected an unprecedented number of homeowners. It simply doesn't make sense for mortgage lenders to bar people forever. In cases where the foreclosure, short sale or personal bankruptcy was beyond your control, it's only fair to earn consideration after a reasonable period of time. The Wall Street Journal recently published examples of loan types and waiting periods, which I'm sharing here!

In the case of a Chapter 13 bankruptcy, you may be eligible for a new FHA mortgage in 1 to 2 years, after the bankruptcy has been completed. After the bankruptcy, you'll  need to show good credit and a strong work history, and have funds for a down payment. FHA loans usually require as little as 3.5% down, though a lender may ask you for more to strengthen your loan application.

If you once had an FHA-backed mortgage, but experienced a foreclosure or short sale, you will need to wait at least 3 years before being eligible for another FHA loan. It's important to show good credit and work history after such events, and have enough money down to qualify.

If you had a mortgage backed by Freddie Mac or Fannie Mae, and experienced a short sale or foreclosure, you may be waiting up to 7 years before you are found eligible for another such loan. Because so many new mortgages are currently packaged  for sale to these entities on the secondary mortgage market, you can expect some hurdles no matter what type of mortgage you had before.

Will there be questions, extra paperwork and larger down payments required? Possibly. The most important thing to remember is that you can recover from a foreclosure, short sale or bankruptcy and buy a home again. You just need to stabilize your income, set aside some money, and pay your bills on time, consistently. From there it's a matter of letting time heal the credit wounds.

As your professional Wilmington and Newark, DE real estate agent, I can refer you to reputable lenders who can examine your situation and prepare you for future homeownership. And when you're ready to look at homes for sale in Wilmington or Newark, my professional guidance will help you find the right home within your budget!

Because I have experience in short sales and foreclosures, I always take the time to counsel my clients and keep their best interests at heart. Whether you are buying or selling a home in Wilmington or Newark, I'll be here to help you! Please contact me today!

Katina Geralis
Wilmington, DE Real Estate Expert
Keller Williams Realty
Wilmington Real Estate
Wilmington Homes for Sale
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