Thursday, February 16, 2012

Mortgage after facing foreclosure

Foreclosure is not so hard situation to overcome. In this situation people think that they will never be able to buy house again. They can think that because no bank will lend to a foreclosure victim? Wrong, a foreclosure victim can also get mortgage again by keeping some basic rules in mind. By taking right decision at the right time helps people in overcoming foreclosure situation and getting mortgage again.

Affects of foreclosure?

Right away after foreclosure it is not so easy get mortgage or even qualify. Down payment and interest rate requirement are very high. Foreclosure affects the credit rating up to 250 points. Applicant can get 75-80% loan on the purchase price of the property by the bank. Down-payment requirement by most of the banks can be as high as 35% and the interest rate might be up to 10%.

What to do for qualifying to get new mortgage after foreclosure?

To qualify for a new mortgage one has to work hard,have to follow some strategies like making a saving plan, work for good credit score etc. After foreclosure one should do everything for repairing credit ratings and side by side have to do some savings also. These savings helps the buyer in giving down-payment at the time of new mortgage. Down-payment reduces the default risk and helps in getting mortgage.

Simple mistakes to avoid after foreclosure?

After foreclosure usual mistakes that people do like they mess up with the payments of other open credit lines. If they missed or delay payments of different debts than it will take a lot of time in repairing credit ratings. So its better to make other debts payments on time to improve credit ratings.

How to improve credit rating?

Firstly one should see ones credit report and then work accordingly for credit ratings step by step . Credit repairing is not so easy after foreclosure so it will take up to 1-2 years. By taking small loans and doing on time payments on different debts helps in improving credit ratings. One should regularly check or maintain credit accounts positively . There are number of ways to increase homeowners credit rating. One is the third party credit repair. In third party repair professionals competent in their work handles your credit ratings. Other way is to post mortgage questions to different forum websites. Basically on these forum websites Experts solve all the queries and shows the right way out .

Summarizing above, foreclosure does not indicate that an individual will not qualify to get mortgage again. It does indicate that one has to plan a better strategy to become eligible again. Extra savings help to accumulate money for the down payment of new mortgage and that savings can be helpful in any harder times in future.

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