If you are looking for a mortgage loan to buy a new house after a foreclosure event; you should know how to qualify for a mortgage after foreclosure. There exists an entire industry which caters to high-risk borrowers that are challenged for credit because of issues such as foreclosure and bankruptcy. This aforementioned industry consists of subprime mortgage lenders that will lend you money at slightly higher rates; however still competition in this category of lenders means that with little research you can get good rates for your mortgage loan.

It is best that you spend at least twenty four months in rebuilding your creditworthiness. Use your credit responsibly, make your payments on time, and do all the small little things you can to add to your credit score. Give up superfluous credit cards, cut down on needless purchases, etc, focus on credit repair. If you rush into a mortgage loan without rebuilding your credit then be prepared for higher interest rates. Aim to achieve a credit score of at least 620.

A very simple rule of thumb is that higher the downpayment you make, lesser is the loan amount. Try and save at least 20% of the total value of the new property you are interested in purchasing. It also helps in another way. After foreclosure you cannot expect to get a 100% LTV, you need to have some money of your own to pay.

Set your target on a home that is affordable. Download a free home affordability calculator at the end of this article.

If the market is declining and you make up your mind to purchase a house, then be very sure that you are going to be in a position to make timely mortgage payments, because if you don’t and you have to sell your home, you may not be able to recover the cost of the house in a declining market.

Find out the worth of the house, do not take the lender’s appraisal on face value, he may inflate the amount so that you end up borrowing more than what you should.