Wait it out
Waiting periods are a common penalty for rebound buyers. But it's not always clear how long the wait will be because guidelines vary among lenders.
The Federal Housing Administration, or FHA, imposes a three-year wait to obtain a new FHA loan, and most lenders follow that guideline, says Bert Carpenter, a loan officer at Nova Home Loans in Chandler, Ariz.
Waiting periods can be shorter for portfolio loans that lenders keep on their own books or longer for so-called conforming or conventional loans that lenders sell to Fannie Mae and Freddie Mac, the government-controlled secondary mortgage market entities, Carpenter adds.
Those buy-now loans typically involve what Carpenter calls "ugly" financing terms. The interest rate will be higher than market rates and might be adjustable or fixed only for an initial term of three, five or seven years.
Waiting periods don't start until the foreclosure is completed, according to Jim Sahnger, a mortgage originator at FBC Mortgage in Jupiter, Fla. Moving out of the house or mailing the keys to the lender doesn't start the clock.