What Is a Foreclosure's Impact on Buying Another Home?
Ways to make a comeback after credit score takes hit
En español | Q. My sister went through a foreclosure. Will she ever be able to own a home again?
A. In time, perhaps. A foreclosure can reduce a credit score by 150 points and stay on a credit report for seven years.
See also: Boosting credit, reducing debt.
Photo by Stephen Lam/San Francisco Chronicle/Corbis
You can rebuild your credit score and own a home again.
But here are ways to help a comeback:
- Work at a steady job.
- Build up at least six months of savings to show you could pay your mortgage if you lost your job.
- Don't max out credit cards.
- Pay your bills on time.
Fannie Mae, the mortgage giant, generally allows new loan applications in three years if a foreclosure was due to job loss, divorce or unexpected medical bills.
You may also like: Take AARP's savings challenge. >>
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<p>AARP on mortgages, PBGC on pensions, Social Security Administration on student benefits. Send your questions to: Ask the Experts, AARP Bulletin, 601 E St. NW, Washington, DC 20049, or email askourexperts@aarp.org. Check out bulletin.aarp.org for previously asked questions and answers.</p>
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