Millions of homeowners across the nation have lost their homes due to foreclosure. That number is going to continue to grow with millions more homeowners having either started the foreclosure proceeding or are currently in pre-foreclosure, meaning that they are behind on their mortgage payments by 90 days or more.
For homeowners who have had their home foreclosed on there is going to be considerable damage done to your credit but you will survive.
The impact a foreclosure has on your credit is a big deal. A foreclosure will likely drop your credit score by 150 or more points. The drop in your credit score could be much greater depending on how many missed payments your lender filed. The more missed payments you have will obviously result in a larger drop in your credit score.
To survive the damage done by a foreclosure you will need to do everything possible to rebuild your credit score. You can do this by making a good use of the credit that you still have available.
You should always start off after a financial crisis by putting together a budget plan and sticking to it as closely as possible. Make sure that your budget allows you to put money into savings. Building up your savings will help you get your finances back on track. As far as taking advantage of the credit that you still have available to you; you should use any credit cards you have available and pay them on time and leave about a 30% balance on the card.
Having a credit history that shows a foreclosure or short sale will make it more difficult to get financing for anything. Having either on your credit history also means that it will take at least 3 to 5 years for you to qualify for a home loan. A foreclosure on your credit history doesn’t mean that you can’t get financing, but will most definitely result in a much higher interest rate. Don’t fret many have gone through or are currently going through this situation and it is survivable.
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One unfortunate effect a foreclosure can have on your credit history is that of security clearances. If you work in a career that requires a security clearance, a foreclosure on your credit can result in the loss of that clearance.
It may take a while but most people that have had credit problems will eventually find someone to make them a mortgage loan. Lenders depend on a increasing pool of borrowers. So, the lenders lower there requirements as the pool of borrowers diminishes.
.-= Dave@Salida Colorado Real Estate´s last blog ..For Rent 614 Oak Street =-.
Avoiding home foreclosure is not always easy. You will have to work
hard, and be patient.
.-= Robby@home foreclosure help´s last blog ..Can I stop the foreclosure on my house if it started already? =-.
Foreclosures can ruin your credit for a while, but you are right it isn’t the end of the road. People can recover and with time and good payment history you can get approved again.