Can you recover from a foreclosure?

Anyone who's been forced to live through a foreclosure knows how tough it is. Many wonder if they'll ever own homes again. The answer is yes - you absolutely will own a home.

One important thing you can do to get back into being a homeowner is figure out the reason for missed payments, and ensure that this wouldn't occur in the future. Many families have budgeting issues - they could actually have afforded payments over time, but are finding that improper budgeting is causing them to have problems making payments. If that's the case, you can better budget in the future, and begin a healthy cycle of credit repair.

Your credit score will certainly decrease if a foreclosure hits your credit report, and a foreclosure will stay on your report for seven years. You'll need to immediately begin working to boost your credit after your foreclosure.

If a personal problem such as being fired or laid off at work, health issues, divorce, etc. strikes your family, you may be eligible for a Fannie Mae loan within three years of the foreclosure - else you'll be waiting seven years.

Freddie Mac will force you to wait for three years before a new mortgage - otherwise the waiting period is five years. Unfortunately, in February, foreclosures that occur due to poor finance management will always be seven years, regardless of circumstances.

If you have a foreclosure on your credit and are looking to get back in the game, start out by paying your bills in a timely manner. Doing so will cause your FICO score to rise, and will eliminate some of the issues you're having with bill payment and credit repair.

Make sure you're taking a look at your credit report, and eliminating any other credit issues you have systematically. You can do this via disputes and other online methods of resolving issues with your credit repair.

Make sure you don't owe anything on your foreclosure mortgage. If you do, this will pretty much stop you from moving forward with another mortgage. And most of all, apply for more credit! Make sure you have a full credit portfolio and that you're paying off bills on time, and you'll see your credit score on the mend. All these things could help you get closer to the mortgage you're looking for.

The best way to ensure your credit score increases over time, and that you'll be eligible for a future mortgage, is to use your waiting period constructively. You will definitely be waiting a while to get the foreclosure off your credit - use this time to increase your credit score, work on old debts, and get yourself into a better financial situation while you wait.