Can I Buy Another Home During a Foreclosure Process?

Reader Question: Can I buy another home while current home is in foreclosure?

Somebody asked a similar question a couple of weeks ago, so you might want to start there:
Current home is in foreclosure and I want to buy another

Can you purchase another home while yours is currently being foreclosed upon? Sure you can ... if you can afford to pay cash for the home. But if you need to get a mortgage loan for your next home purchase, I would say your chances are slim to none (for right now, at least). I don't mean to sound harsh. I just feel that painting a rosy shade on it would be a disservice to you, and also dishonest.

You will be able to get another mortgage someday. But it won't happen while your current home is in a foreclosure process. To understand why, you have to step out of your own shoes and into the shoes of a mortgage lender. Many of them are in survival mode right now, because they have a lot of nonperforming loans on the books (from foreclosures) and no way to recoup their losses or prevent further ones.

Additionally, the record-breaking numbers of foreclosures we have seen recently were the primary cause for our economic crisis. So when you approach a mortgage lender for a loan in your current situation, you are saying this:

"My current home is in foreclosure because I could not make the payments. And I know that's something you're terrified of right now, given the shaky ground your bank is standing on. But how about giving me a new loan anyway?"

If you haven't done so already, I would talk to your current lender about workout options to avoid foreclosure on your home. A lot of lenders are offering repayment programs and the like to help homeowners get back on track. I don't know how far into the process you are, so it may be too late for such a program. But it's worth some further research.