Did you just lose your home to a foreclosure? Even though you are no longer a homeowner, do not worry this will not always be. The lending requirements may have become more strict, but there are still a few tactics that if implemented would let you become a homeowner once again.
Here are the steps that the experts in the industry suggest you should take if you want to have a home again.
Improving Your Credit Score
According to a real estate industry expert, the biggest impact of a foreclosure is a decline in your credit score and so rebuilding it again is the first step you should take. The drop can be anything between 100 and 300 points, depending on the credit record you have held in the past. Yes, this does sound worrying, but you can do a lot to have a better score once again.
Pay your bills on time and regularly, and avoid anything that can have a negative impact on your credit score. Do not miss any of the payments and do not let your debt increase more than what it is.
Maintaining A Positive Credit History
You have to show lenders you can be trusted with credit. Timely bill payments do help with this, but it actually goes deeper than that. Make sure that you have paid off all your past-due accounts and all credit card bills. All this will help you in lowering your utilization ratio, which should not be more than 10%. Only when this is the case will you have the highest possible score.
Avoiding Foreclosure Again
Though a single foreclosure can be frustrating and has an impact in your finances, it still does not make you broke. When you do become a homeowner, you should avoid another foreclosure. Keep the following in mind right from the start and you will never have to experience any foreclosure.
Buy A House That You Can Afford
No matter how high the amount, the financial agency may agree to lend to you, you should only take what you can afford in the long run. Determine this value beforehand, and make sure the house you opt for is within this budget.
Have An Emergency Fund
An emergency fund is a really good option that provides you with pace of month. Save some of your income every month, so that you can continue to make monthly payments even if you become ill or suffer from unemployment.