Buying A Home After Foreclosure In Florida
The housing market is in an upswing and will continue to recover over the next several years. It is the best time now to start cleaning up your credit and re-establish your financial stability when you plan of Buying a Home after Foreclosure in Florida.
The housing market recovery started late last year and will continue into 2013. It still will be a long and slow recovery before prices recover to the level 2006/ 2007. So far we expect a price increase in 2013 of 8-10% compared to last year’s prices. Home supply (inventory) in the past month has decreased and could not hold up with the demand. More listings have been sold, and fewer homes entered the market. This is a typical situation for a market cycle where demand supersedes the supply and therefore home prices increase.
If you plan of Buying a Home after Foreclosure in Fort Lauderdale it is more important than ever that you establish a good credit. When you take the time and establish your good credit it will allow you to buy your next home with a minimal down payment and the lowest interest rates on the market available. You need a plan and discipline to establish your goal of Buying a Home after Foreclosure in Fort Lauderdale.
If you lost your home to foreclosure short sale now is the time to get you back in a favorable position for your next home purchase. You still have enough time to take advantage of the market and repair your credit. Since the recovery will be slow prices will not rapidly increase and interest rates will stay low. It needs some time, work, and discipline on your part. Don’t lose hope instead focus on your goal- Buying a Home after Foreclosure in Fort Lauderdale.
Many finical institutions will consider your new loan application after three years of good credit records. Now is the time you get you back on your feet and re-establish your credit. Here is what you should consider to do:
Fix your credit
- It is important that you start to make as many as possible payments on time. Not only on your credit cards, but also on your everyday bill’s like utility, waste, cable etc.. If you still have other debt obligation it is more important than ever to make those payments on time. On time payment will boost your credit score. The more on time payments you have the faster your credit score will raise.
- If you still have credit cards with a balance try to pay the balance down. But don’t pay it down and leave it at zero balance. Try to use it and pay it off right away. Don’t close credit card account that will influence your credit score negative, while you lose “credit” available to you and this can lower your score.
- While most home buyer programs require a down payment, now is the time to start saving for it. At the time of this writing FHA loans require a 3.5% down payment and allow sellers contribution for closing cost up to 6%. Example, if you want to buy a home and need to borrow $100,000 than you need a $3,500 down payment. Consider closing cost as well which you have to pay for if the seller is not willing to contribute. Closing costs are between $4,000-$5,000 in Florida per $100,000. It should be easy to figure out how much you have to save each month for the next three years so that your down payment and closing costs are covered.
- Saving money also means saving for an emergency. More and more we see this are a requirement by many lenders before approval for a loan. You should consider having at least 6 month living expense saved up. This emergency fund is to be used only when you are out of work or lose some income for whatever reason. This emergency cushion should bring you over hard times you may face in the future. Save this separate to your down payment and closing cost.
Don’t buy what you cannot afford
- You have built your credit score up over the past three years don’t ruin them with an impulsive buy. Good deals will stay for some time and you will have time enough to buy out of an educated decision.
- Buy only what you can afford and what you feel comfortable with paying every month. Many lenders will approve you for a much higher loan amount but stick with your plan. Lenders will pre-approve you on your income/ debt ratio but do not consider other of your living expense you may have. It is up to you to figure out a monthly budget which you can afford overall.
If you stick to your plan and follow the recommendation you should be able of Buying a Home after Foreclosure in Fort Lauderdale after three years of your foreclosure or short sale. Many lending institution will allow you to apply after three years again when you have good credit, maintain your credit and have an on time credit profile. Therefore, it is important that you rebuilt your credit now if you plan Buying a Home after Foreclosure in Fort Lauderdale.