With the rates of homes going high in the next five years, most people want to get into a home when it is affordable. In the next five years, the price may increase by more than 5%. That’s why everyone is in a hurry to get home. However, many people who want a home, think they aren’t eligible to get one.
There are people out there who just got a job or changed a job and think they aren’t eligible for home loans. But many mortgage lenders break the myth around home loans. According to a popular mortgage lender, borrowers with foreclosures on their records can also take loans. Here is how they can do it.
People with foreclosures think that they are spoilt for loans for the next seven years. But that’s not the case. A foreclosure may put a dent in your credit report. But maintaining a good credit score can get one back on track—a low debt-to-income ratio and an established credit history help to counterbalance then foreclosure.
People with a foreclosure can also opt for portfolio lenders. This type of loan has higher interest rates and down payment. But it is an option out for people with foreclosures who have no other way to take loans.
It is better to take an FHA than take a portfolio loan. But there are certain conditions for FHA. For FHA to be approved, the foreclosure must at least be three years old before they grant the borrower a loan. After that, they scrutinize the income of the borrower to make sure they will be able to pay the mortgage.