In general, the only way to keep your home is if you are able to make a normal monthly payment. Even if you can’t afford your existing payment, we would be able to negotiate a lower monthly payment or do a loan modification. But if you couldn’t afford a lower payment either, then there would be no reason to try and save the home.
In many cases, it’s better to do a short sale with the home to stop the foreclosure and rent a place for a year while you repair your credit and get your finances back in order.
It only takes about 12 months to recover from a foreclosure before you can buy a home again. The key to recovery is to keep all your payments on time and re-establish a good rental and payment history. If you can do this for a period of 12 consecutive months and get the other negative items removed from your credit, then you should qualify for a new home loan.
When getting any loan, it’s not just your credit that is reviewed, they’ll also look at your income, down payment, and the value of the home. Technically, if you can afford a higher payment, and there is enough equity, you could get a loan immediately after foreclosure. Lenders don’t always look at credit as the sole determining factor. Lenders who provide these types of loan are called “hard money lenders”. It’s alos possible to get a loan right away by having a co-signer. This is a great way to quickly re-establish your credit and mortgage history.
If you do decide to do a short sale, you’ll need to get the home listed with a real estate agent as quickly as possible. As soon as you get an offer, you’ll simply take it to your lender and offer it to them as a short sale. There are other issues and problems with a short sale, so if you decide to go this route, please contact us to get more information about that process. We’ll be happy to answer any questions you have.