There is hope after foreclosure!
March 8th, 2007 by Mark FlandersA foreclosure is not proof of a character defect!
The process of having your home taken away from you is demoralizing and demeaning. Homeowners are treated like credit criminals. Employees working in foreclosure departments often treat the debtor with disrespect and disdain. Yet many foreclosures are the result of some catestrophic event in the home owner’s life. Serious medical problems, loss of income, death of a spouse and divorce in a tough real estate market are all common situations that can lead to the loss of a home.
Despite the fact traditional mortgage lenders may not have an interest in working with you in the time following foreclosure, rest assured that there is an active, professional goup of lenders looking for your future business.
While many lenders may refer to your situation as ‘credit-challenged’, other more creative lenders propose an entirely different and refreshing perspective. Countless lenders in the subprime mortgage industry agree that individuals who have endured financial mishaps, are among the most appreciative and loyal clients they have. The subprime mortgage lender will not have the ability to offer you the lowest rate available due to your credit history, however, if you take a sufficient amount of time investigating the numerous available loan programs, you may be surprised to find lower-than-expected and competitive rates. And no matter what type of financing is acquired, the significant tax benefits of home ownership remain the same for all borrowers.
Among the various and imperative things you will need to do post-foreclosure, is begin the credit rebuilding process right away. It is simply impossible to start this course of action too soon. Many mortgage lenders recommend that you take a two-year loan break and focus on credit concerns. Be certain that you make payments to any and all creditors on time; perhaps even early. Make every possible effort to avoid credit card balances; if you rely on your credit cards for monthly necessities, attempt to pay your balances in full at the end of each and every month. Often times consumers assume closing unused credit accounts will raise their credit score, on the contrary, it is better that you simply do not use these sources of credit, but maintain them in good faith. Closing accounts can, in many cases, lower your already fragile credit score. Your focus point should be maintaining adequate employment, a satisfactory rental payment pattern, and optimal credit responsibility. These few, but vital suggestions alone, will help you get back on the road to home ownership.
Here are the basic things to do to ensure the shortest amount of time between a foreclosure and the purchase of a new home.
- Credit cards — If you have one or more open accounts and can afford to keep them, pay promptly every month. In order to achieve the highest possible credit score, keep your balances at 30% of your available credit limit.
- Rent payments — Make sure this is the first thing you pay every month. Your rental payment history will be a big factor when you apply for your next mortgage.
- Other credit — Pay on time. If finances are very tight, make sure you pay each payment within 30 days of the due date. You may have to pay a late fee for late payments, but late payments are not reported to the credit bureaus unless the are 30 days or more late. Paying a bill 8 or 10 days late will not show up on a credit report.
- Savings — Begin a savings account immediately. Even a small amount of money deposited each month will add up in 24 months. These “assets” will be carefully reviewed when you apply for your next loan. Set a target of 2 full months of mortgage payments in the account. Once you have accumulated that amount, begin saving for closing costs.
- Payroll taxes — Review what is being withheld from your paycheck. If you are receiving a tax refund at the end of the year, you should consider changing your deductions. It makes no sense to offer Uncle Sam an interest-free loan while you struggle.
- Establish new credit judiciously — You will get credit offerings in the mail. Ask yourself first if you really need these credit sources. You really don’t need a bunch of credit cards to have a strong credit profile and there may be more efficient ways to build a good credit report quickly.
Foreclosure can be a emotionally crushing experience. But it is not the end of the world. A baby may take very small steps but, string enough of those steps together and you can cover quite a distance. The time after foreclosure is a time for baby steps. They will add up.
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[...] 13.There is hope after foreclosure! :: SoundBiteBlog.com Foreclosure can be a emotionally crushing experience. But it is not the end of the world. A baby may take very small steps but, string enough of those steps together and you can cover quite a distance. The time after foreclosure is a time for baby steps. [...]
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[...] 11.There is hope after foreclosure! :: SoundBiteBlog.com Foreclosure can be a emotionally crushing experience. But it is not the end of the world. A baby may take very small steps but, string enough of those steps together and you can cover quite a distance. The time after foreclosure is a time for baby steps. … It was great to read this much needed information. I made the… [...]
[...] 11.There is hope after foreclosure! :: SoundBiteBlog.com Foreclosure can be a emotionally crushing experience. But it is not the end of the world. A baby may take very small steps but, string enough of those steps together and you can cover quite a distance. The time after foreclosure is a time for baby steps. [...]
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Great post. Some solid advice for those facing foreclosure. It is good to hear some advice and positivity. Foreclosure is not the end of the world, there are things that can and should be done to get past it. Real estate short sales and loan modifications are great ways to avoid foreclosure if they can be done in time.
This artical is great allot of people think there is no hope after losing a home due to a bad loan, losing a job etc. More information like this should be avaliable for these families letting them know it doesn’t make them a bad person and you will be able to buy agian. Thank you.
I am working on cleaning my credit report to re-purchase a house again. I lost my job and my income was never the same. This is not the end becasuse I still have life in me. We have to keep standing up for what we know.
if property is bank owned and they sell for more than you owed them do you see the profit?
It was great to read this much needed information. I made the mistake of healping a friend on a refinancing and the property ended in foreclosure. Of course I was livid, but I decided no need to cry over spilled milk. I decided to begin rebuilding my credit by taking a couple of credit cards and I have not missed any payments at this time. I am working hard to repair the mistake that I should have been smarter in making. As you said it is not the end of the world, in most cases it should be seen as a beginning to a opportunistic world. I look forward to rebuilding and make a purchase when my time is right. Thanks for the encouraging words spoke within this article of faith.
Great blog and I really enjoyed reading it. I appreciate your effort and the quality of the information you provide. I enjoyed to be at here because one of my point has been cleared here.
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How can I find accurate data on the number of foreclosures in Kitsap County for the last several years? I hear they are on the increase but I have not experienced that at my business.
[...] In March of this year SoundBiteBlog.com published an article titled There Is Hope After Foreclosure. On September 4th we received an email that reminded us once again just how small and personal the planet is when you maintain a blog. [...]
Maureen: It’s happening all over the country. Washington is still fairly low. Hopefully it will remain that way. But I think many of the people who find themselves in difficulty now, will want to purchase again in the future. There does not seem to be much information available to them on just how to make that happen. Hopefully this will help somebody who is looking for information.
PS – I’m in the process of making all the articles on SoundBiteBlog printable in PDF format. As soon as that is complete, you’ll be able to print the articles out for any clients you think might benefit from them.
Very helpful post. I get a lot of questions about foreclosure right now because Michigan has such a high rate of foreclosure. This shows that there is hope.