Many people fell on hard times during the recent recession and some lost their homes to foreclosure or had to do short sales. Some may have even declared bankruptcy to get out from under their debt load. Many of these people have been living in apartments or rental properties for the last few years.  So, how long do these people have to wait before they can think about buying another home? The Waiting Period Matrix and my friend and mortgage office Steve Bloom has put together will help answer that question. Click here to see Steve’s matrix.

Of course the question isn’t just whether you have waited out the time that the banks want to see before they will consider you; but, also, what did you do during that time. Did you get your life and your finances back in order or did you just keep up your old ways and keep going further into debt? Hopefully you learned from the bad experience of that financial hardship and turned things around in your life. Many people did. Most of the people who were forced out of their homes actually had good jobs, but factors such as reduced overtime or maybe one of the two workers in the family being laid off for an extended period, combined with getting overextended on consumer credit, resulted in them losing their homes.

So where do you need to be credit-wise right now to get back into homeownership? You’ll probably need a 640 or better credit score, in addition to proof of steady employment and earnings. You’ll find it easier to get back in the game if you also managed to save enough for a 20% or better down payment. There are still programs that allow for as little as 3-5% down, but the credit-background scrutiny associated with those programs still might preclude you from using them. If you are a veteran and never used your VA benefits, you might also tap into that resource. The USDA Rural Development Program is still offering great programs for those who qualify on properties that are considered to be rural.

The best advice that I can give you is to contact your local mortgage person – I would recommend Steve Bloom (248-224-2321) of A and N Mortgage in this area - and have them take a look at your situation. Even if they tell you that you’re just not quite there yet, they can usually give you good advice on what you may need to do over the next year or so to be ready.