Mortgage crisis a decaed later, the after affects still show and lnger for some who lost their homes after a default in their mortgage payments. Some of them are still wondering ‘what happens to families after their personal financial disaster’?
For more homeowners, once the forelcosure is final, the financial and emotional drain is far from over. For those how have endured a foreclosure may eventually look at becoming home again.
Life After Foreclosure, What’s Next?
Most folks who lost their homes during the housing crisis or after are now at a certain point where they are wanting to buy another family home. Soon they will find out that some lenders do require a certain amount of time as a waiting period.
Lenders are comfortable with seven years waiting periods before a foreclosed homeowner should apply for a new mortgage.
Looking at some issuses foreclosed homeowners deal with are the consequences of foreclosure.
- Finding a new home
- Suffering the credit fallout
- Buying another home
- Do you owe your employer an explanation
- Be able to live through the loss
The New Home
First is the obvious to most people, ‘finding a new home’ where and how to find a new home to live in. At this point, the foreclosued homeowner has a lack of cash on hand, especially if they waited too long to sell their foreclosed home, or failed to sell to an investor. A lack of cash even for a rental deposit can bea frustrating issue for those who failed to sell to aninvestor quickly, prior to receiving the Default Notice. Getting re-established quickly is evidence of a failed financial obligation in your past. This failure scares landlords.
Here, after pulling your credit report, it may be more difficult to getan approval for a rental property or apartment from a landlord or rental management company. So look atrenting from the individual rental landlords, those who carry a smaller number of rent houses.
Some times when contacting those type of landlords, you can make your personal appeal to them and provide more information to help support your current position. Show the landlord that you can mkae and manage your rent payments.
In today’s current market situation, with covid19 hanging around. Landlords are looking for stable income from their tenants. There could be and probably are more vacancies in the Dallas, Texas area then in recent past. So landlords are looking at the best prospects to rent to. Some realtors, who help find rentals for peolpe seeking a rent huose or aprtment, may be bable to help you find those individual or smaller landlords types to work with.
Dealing with Credit Issues
As a homeowners who has defaulted on a mortgage, creditors and landlords will consider it more likely that they will not collect their rents thatare owed.
There may be lenders who will work with you, but the rates for credit card companies and auto loans, will be higher, with fees, all will be more expensive to deal with.
Rebuilding your credit can be done, it just takes time and consistency. You are starting oevr again.
Know that it is best to start immediately!
Start by getting familiar with your credit report. Yuo can get a free copy of your credit report from annual credit report . Here you are able to get al lthree credit reports from the different bureaus once a year.
It’s time to start reestablishing a consistent history of on-time bill payments. Even Experian can help you raise your credit score by using yuor utility bill payments each month.
You will experience higher interest rates on everything from credit cards to auto loans. Our best advice is to pay off all loans prior to the due date. Using a credit card will help to improve your credit score over time, while replacing the negative activitywith positive activity and on time payments.
Even banks and credit unions offer a credit-builder products. Things like secured credit cards and secured loans, that ar emostly designed for customers with bad credit issues.
Buying Another Home
Now after dealing with a foreclosure, you want to buy anew home. Again, genaerlly there is a mandatory waiting period before you can get approved for a new mortgage. The length of time required by Fannie Mae for a conventional mortgage is seven years.
But, you may be able to get a new mortgage sooner than that, just depending on your circumstances and the type of mortgage you want. Should you be able to prove thatthere were extenuating circumstances with your foreclosure, Fannie Mae guidelines for a shortened waiting period of just 3 years. But you must be able to document the extenuating circumstances. This means that they were beyond your control and not likely to happen again. To include a sudden job loss, large medcial bills or a death in the family, resulting in a loss of income.
With the three year waiting period, there wil lbe more stringent requirements for getting a mortgage to include a larger down payment. But before you go buying that vacation home or rental property, the waiting period remains at 7 years, regardless of your extenuating circumstances.
Try an FHA loan as that might be a better option for you in obtaining a mortgage after a foreclosure. As a minimum time from foreclosure to until when you can be approved for an FHA loan is 3 years. Again, you must be able to document the extenuating circumstances that were beyond your control. Here you may be able to request an even shorter waiting period for an FHA loan. As well, here you (the borrower) will need to show that you have been practicing good bill paying habits since the foreclosure.
Surprisingly enough, there is a silver lining for you homeowners who have gone thought the foreclosure process. Mortgage debt being discharged via bankruptcy. Now, the waiting period for a new mortgage loan after a bankruptcy is even shorter thn with a foreclosure. Fannie Mae guidelines allow mortgage lendwers to approve new mortgages after a waiting period of only 4 eyars, (or two years, with extenuatign circumstances), rather than seven years.
Telling Your Potential Employer
Now, if you lost your job and your home, yuor new job hunt shouldn’t be hindered by the subject of your foreclosure at atl during interviews ir discussions with your new employer. Unless of course you are applying for a job which you are handeling money. The Federal Credit Reporting Act has rules employers must follow, such as notifying the applicant of a credit check and most companies today limit credit checks so as to not to run afoul of the law.
Employer can determine from your credit file that yuo went through a freoclosure. Being proactive is always the best thing to do. Being an honest employee will go a long way, so let your employer know from the start of you emlpoyment.
Robert Hernandez
We Buy Houses Cash Dallas
webuyhousescashdallas.com
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