Buying a home after foreclosure

[Radiance]

I currently have a fico score of 680 (aprox)
I am facing a posibility of foreclosure, short sale, deed in lieu. One of those.

If I go into foreclosure, how much time after will I be a ble to buy a home with a decent interest rate (under 8.0%)?

My original mortgage was at 8.0%.

[swanson719]

It depends on your debt to income ratio and amount of money you can put down. Traditionally, the more you put down, the lower the rate. They will look at your situation when you were foreclosed and your situation when you go to purchase a house again. If they look alike, I don't you'll get a house. There really isn't a time frame with this like there is with bankruptcy. It all depends on the underwriter at the bank.

When you go to get a house again, you need to meet the following criteria:

1. 20% or more down.
2. No other outstanding debt.
3. At least 3 months worth of expenses including mortgage in a savings account.
4. No carried balances on credit cards.

Banks want to see a clear, and often drastic, improvement in a persons lifestyle financially before they will loan to them again after a foreclosure. If you bought a house and then get foreclosed due to unemployment, then you will probably be approved for a house based on a single income as opposed to dual, or about half of what your single income is if you were the only one on the mortgage to begin with. They want to make sure you can pay. So, the sooner you are financially stable by the banks standards, the sooner you can get a mortgage under 8%.

You probably need to wait at least 3 years before you will have a serious chance of getting approved with a good interest rate. Why were you at 8% to begin with? That screams something recently bad in your credit history.

[Radiance]

Thank you, swanson719!

Excellent input on my two posts. It really helped!
For all I know now it seems i should be able to afford the payments, I need to do two things:

1) get out of unsecured debt, which I might be able to do by renting a room. It should take me about a year to get rid of the 8600 i have.
2) Fine tune my budget, with a net income of 5800 it seems I should not be struggling as much as I am now.

I did wanted to get out of the house, among other things I wanted to relocate to a higher quality of life city such as Columbus, OH. But it seems that will have to wait...

I am still going to schedule a consultation with a real state attorney, but I don't expect any significant changes to what I know now.

I took this mortgage 4 years ago and my debt ratio was even worse than it is now, my credit score was about 620 and I so got the rate of 8.0.