Survival Tactics for Life After Foreclosure

Survival Tactics for Life after Foreclosure

If you’re in foreclosure, facing foreclosure or have recently lost your home in a foreclosure, here are some survival tactics you can use to keep moving forward.

The key is not to look back! Move forward. As hard as that might be, this is not the time to start asking yourself what you could have done to prevent this. It’s done. Move forward and get back on track. Thousands of people are in your same situation. You need to keep your head up, stay focused and spot good opportunities as they come along.

You need a new place to live. If you’re still in your home but in foreclosure, this is going to be your best chance to save some money for a home to rent. While you’re staying in the home, put aside the monthly amounts you would have paid the mortgage company or bank. You must save at least two months rent in savings. With your current situation, your credit score will be too low for many apartment complexes or home renters to offer you a place to rent, unless you can come up with two month’s rent and one month’s deposit. That’s usually enough for them to believe you’re serious. Almost all rentals require a credit check. Your scores will likely be low, so you’ll have to have a cashier’s check in hand with proof of income to overcome their objections.

There are programs from banks called Cash for Keys. The bank that is foreclosing on your mortgage may try to persuade you with a few thousand dollars to move out within the first month. It’s easier to sell an empty foreclosed home, than one with the family still in it. If the amount the bank is offering is greater than three or four month’s payments, it’s worth considering.

When choosing the place to rent, you want to make sure it fits your budget. A good rule of thumb is that the rent should not exceed one third of your gross monthly income, before taxes.

Your Credit Scores: Mortgages weigh heavily on your credit score. After the first missed payment, you can expect your credit score to drop by 100 points. Banks, mortgage companies and credit reporting agencies do this to make sure you don’t run out and apply for more credit cards. The drop in your credit score of 100 points will stop any and all banks from issuing you new credit immediately, but you still have open credit lines with your current cards. If they’re not maxed out yet, use them wisely as you move forward. Unlike bankruptcy, you still have accounts to maintain. Paying the minimum monthly payments on these accounts is paramount. To overcome the late mortgage payments and the foreclosure, you will need three open credit lines that are paid on time for 36 months in a row. Income Source: Your income is the most important part of the plan after foreclosure. The plan must include all necessary steps to keep your job or get a job as soon as possible. This is not the time to look for the dignified job. Just get a job! In your current job, look for ways to increase your income, take on new responsibilities. You’re now on the road to recovery and need to go the extra mile to ensure that you work your way out of debt for the next 36 months.

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