No. of Recommendations: 2
I went through a deed-in-lieu about 6 yr back and my credit has not completely recovered.

A deed-in-lieu (DIL), by itself, shouldn't be keeping you from getting a new mortgage. Depending on the circumstances, you can qualify for a new mortgage in as little as 2 years after the DIL occurred. However, given that your current mortgage is an ARM currently at 6.75%, I suspect that you actually had 2 houses (and mortgages) at the time of the DIL, which would mean that you were probably considered a 'strategic defaulter' That means you would have to wait for at least 4 years after your DIL before qualifying for a new mortgage.

However, since it's been 6 years, the DIL shouldn't be stopping you from getting a new mortgage. Because there are still probably some late mortgage payments, in addition to the DIL, on your credit report, your credit score may not qualify you for the very best rates, but if you haven't had any other derogatory items on your credit since the DIL, you should be able to get a mortgage that's lower than the current 6.75% If you wait until the DIL and the late payments age off of your report (should occur after 7 years), then your credit score should improve more, and you will be more likely to qualify for the best rates.

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