Life After Foreclosure
Life after a Foreclosure or a Short Sale
You find yourself completely relieved because the process of foreclosure or selling your home through a short sale is complete. Now you can look towards your future and do things differently to insure success. Not all has been lost. You still have your family and you even walked away with some relocation assistance cash from your lender through a qualifying program. The biggest questions you may have are what to do next and when will you be able to purchase a home again.
After a foreclosure or short sale, the most important thing to do is find a home to relocate to. You may not have all options that once were available to you, but renting is an option and the best option for you at the moment. Many landlords will run a credit report for potential tenants, so it is beneficial for you to be open and honest. Explain your situation and you will be more likely to find the right landlord for you and your family. Your relocation assistance cash could be of assistance to you in this case as well. Offering up an extra security deposit can be attractive to a landlord and may make them more apt to take a chance on someone that found himself or herself under extenuating circumstances.
What to Do and What Not To Do
Now that you have found a new place to call home, how can you build yourself back up? The important thing to do is live a budget friendly lifestyle. Work on staying within your means. Often times, circumstances of your financial difficulties were beyond your control, but now that you have been relieved of your mortgage debt, maybe circumstances can change. Renting a property that is more affordable is important and paying your bills on time is also key. Unfortunately, it is rare for rent payments to be reported to credit bureaus, but your other bills such as credit cards do report. In addition, your on time monthly rent payments can result in a great letter of recommendation from your landlord. Be sure to keep records of your monthly payments. Do not pay in cash so you can keep these records. This will show a future potential landlord or mortgage company an improved track record of payments.
When can I buy a Home Again?
After a foreclosure or short sale, your credit score will decrease. There is a waiting period before you can qualify for a mortgage again. Depending on the type of loan you are seeking, you can reapply within as little as three years. For example, an FHA loan wait period after a foreclosure or short sale is three years. In contrast, a conventional loan has a longer wait time of seven years from the date of short sale or foreclosure completion. It is important during this time to work on improving your credit score and keeping your payment history current. Saving up for a healthy down payment is also important during this waiting period. Your future will look bright if you stay ahead of your financial affairs and explore your options. If you would like to discuss your options, please give us a call at 949-413-7911 or contact us.