Q. Is it possible to get another mortgage once you have lost a home to foreclosure? If it is even possible, how long would one have to wait?

A. Yes, it's possible.

You've probably read that subprime lenders (those dealing with people with bad credit) are more strict about whom they loan to nowadays. In fact, the Mortgage Bankers Association expects the number of subprime loans will decline by 35% this year, but they are still available. Depending on your credit score, you could probably get a subprime mortgage today, but you would pay an outrageous interest rate -- maybe 12% or 14%. Interest rates are all about risk and with a recent foreclosure you are a high-risk borrower, at least right now. And it is impossible to get 100% financing (no down payment), but you might be able to get some kind of loan.

We recommend that you wait because the high interest rate you'd get you in trouble again. And we definitely wouldn't want you to get a dangerous loan like an option ARM.

An FHA-backed mortgage, available three years after foreclosure, would be a good option. During this three-year period, you could work on reestablishing your credit. You do that every time you pay a bill on time or pay down your debt. But don't apply for new credit.

When you qualify for an FHA mortgage you'll get a better rate, only need a 3% down payment and could obtain that money from a down payment assistance program, or DAP. The best thing about such programs is that the money for your down payment is a gift, not a loan. You never have to pay it back.

If you can raise your credit score to 720 or so, you should be able to get a conventional mortgage with no problem. If your credit report shows that you have changed the way you handle your finances and that you are now paying all you bills on time, you could probably qualify for a good rate.

The foreclosure will remain on your credit report for seven years. It just wonâ??t be the problem it is now.