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Mortgage Loans after Foreclosure

Generally if a person faces foreclosure, one of the worst effects which comes on them is poor credit score. All this gets people to face difficulties in securing loans in future specially mortgage loans. This is because for lenders credit score is the most important thing by which they can judge you and will know your creditworthiness. For lenders low credit score is an indicator that the borrowers are not capable for repaying the loan and for lenders the repayment of loan is the only thing which they are concerned of. Still there are some ways by which you can secure a mortgage loan even after foreclosure or you can prevent yourself from foreclosure.

Preventing a Foreclosure
The most common solution for everything is to repay the loan on time. If a person repays the loan on time then one doesn’t need to worry about the foreclosure. However, every person tries to pay off the loan on time but there are some unforeseen events in life which stop or divert them from maintaining regular flow of income and hence their chances of regular repayments. To deal with such a situation, it is important that a person chooses the right mortgage loan package.

There are a numbers of companies who are dealing with mortgage loans and now even there are companies which deal with their customers online for lending them money. These companies have different plans and packages which put people in a confusing state. So, it is important to go through all the packages available with them and understand the advantages and disadvantages of these packages to choose the best one that suits your income.

Anyhow a person should look if there is an option in their mortgage package using which they can stop paying debt for the time being or for a small duration if they have a valid reason for the financial hardship they face. By this you can stop making payment for your mortgage if you face difficulties in paying them. However, once the repayment hold period is over, you need to get back to the normal repayment schedule. This agreement is called as forbearance agreement which you take with the mortgage package.

What to do when you get a foreclosure?
If you are facing foreclosure then it means that the mortgage package you choose doesn’t have the forbearance agreement and you have not made regular flow of monthly installment against the loan amount for at least three months. If it happens so then don’t get panic just follow these three simple steps:

Re-establish your credit
After foreclosure your credit score gets really low and for the lenders to know about your foreclosure is never really difficult. So, in such case it is important that you improve your credit score. You can improve your credit score by taking a new credit account and make regular payment of your credit balance if you cannot pay them in advance. This will show the lenders that you are getting concerned improved regarding your credit and this will make lenders realize that still they can depend on you and give you loan that you will manage to pay off it on time.

Be more patient
Once you face a foreclosure then you should not take a mortgage loan immediately as the lender will grant you bad credit mortgage loan in which high interest rate is charged by them because of the risk which is there in lending you the money. Try to improve your credit score as much as you can because by this you will get a no credit check loan in which you will not be charged with very high interest rates.

Choose wisely
If you can’t wait for long after foreclosure then make sure that you take mortgage from a lender who is charging you less interest rate. For this you have to go to many lenders and get quotations from them and then you can chose the lender who is charging you less interest rates and whose cost of loan processing is low.

Getting mortgage loans after foreclosure is  no doubt a difficult task, but then again it is not impossible. In the current economic environment lenders are more open into listening to the reasons for your bad credit and the reasons for the foreclosure.

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