Is there life after foreclosure?

Foreclosure. The word alone is enough to strike fear into the hearts of most homeowners. Yet due to the mortgage and housing industry implosions more and more people may find themselves facing this extremely difficult situation. If you are one of those people, don’t give up hope! As difficult as this time is, you can take action and repair the damage done to your credit while preparing yourself for home ownership in the future.

Release

The first, and perhaps the most important step to moving on from a foreclosure is just that: move on. Forgive yourself. You cannot carry feelings of guilt and shame with you into your post-foreclosure life. Dwelling on the circumstances surrounding your foreclosure can make it very difficult, if not impossible to move on and form the new habits you’ll need to repair your credit. Think about it. If you are busy beating yourself up how can you move on? How can you notice opportunities for growth and financial advancement? You may be feeling angry, or be overwhelmed with loss. That’s to be expected. Just try not to amplify the situation by giving those emotions an indefinite life span. Your foreclosure is a clean slate, an opportunity to start again with the benefit of experience and a few tough lessons learned. But what will you do with the opportunity?

Rebuild

The first step in rebuilding your financial life after foreclosure is taking a good hard look at your income and spending patterns. Track every penny you spend for a month or two. If you have never done this before, it can be very revealing! Once you see where you are spending your hard earned cash, you can correct any imbalances and direct funds where they can make the biggest difference for you and your family. There are many budgeting tools out there, from Quicken to Mint.com, but yours can be as simple as an Excel spreadsheet or a piece of ledger paper! It doesn’t matter what you use, just use something and stick to it.

While you are “auditing” your expenditures, you should also be checking into your credit reports. There are three main credit bureaus, Experian, Equifax and TransUnion. In the future, lenders will review the information reported by these companies as they determine if you will receive a loan. However, mistakes pop up on these reports all the time. It is vital to review your reports and fight any misinformation. You don’t need any additional “dings” hindering your path to healthy credit. As a consumer, you are entitled to review each bureau’s report on you for free once a year, and it’s important to review all three because the information can vary from report to report.

Once you have a clear picture of your financial situation, it is incredibly important to maintain your other lines of credit. Make sure you keep all of your accounts up to date as you work toward paying them off. And while it may be tempting to cancel all of your credit cards and move toward a cash only lifestyle, consider keeping a few accounts open so you can immediately begin establishing a positive credit history. If you have had difficulties with late payments in the past, explore the your bank’s bill payment services. Many banks and credit card companies let you schedule your payments in advance, so you don’t have to think about it every month. And if you schedule your payments on payday you can ensure all your bills are attended to immediately.

However, if you’re still feeling overwhelmed by your obligations or an unmanageable financial picture, get thee to a Credit Counselor! These professionals ready and able to help guide you through this process, from negotiating with your creditors and helping you set up a spending plan to preparing you for homeownership once again. Check out the National Foundation for Credit Counseling at nfcc.org for more information.

Reclaim

These strategies will help you regain control of your financial destiny, and move you from crisis to stability and health. Once you find yourself on surer ground, it will be time to start saving and eventually investing. The biggest investment most people make in their lifetimes is the purchase of their homes, so saving up for a down payment is an excellent place to start.

It may be scary thinking about owning a home after all you’ve been through, but don’t loose sight of that goal! You have set up a spending plan and repaired your credit. Home ownership is still an option for you when you are ready for it. A lease to own program may be an excellent option for you, as it allows you to save up your down payment while getting established in a new home. So don’t let fear keep you from moving forward. If you’ve followed these steps you will be well on your way to a second chance with home ownership. Best of luck to you. It’s time to get started on your life after foreclosure!

Helene M Moore Windermere Prestige Properties
helenem@windermere.com
WWW.MooreVegasHouses.com