There is a Silver Lining Even after a Foreclosure

Buying a home is the most fulfilling experience; however, losing it is equally as devastating. It is a terrible feeling and we often take a lot of time to come to terms with such a situation. There are many reasons that lead to foreclosure. The more common ones are as follows:

• Unforeseen incidents
• Job loss
• Inability to refinance
The impact of a foreclosure is often overbearing. Besides the emotional implications, there is an immediate need to find a place to stay. Foreclosure is also accompanied with an unfavorable effect on the credit rating of a homeowner. It is a personal financial disaster and the individual must take time to cope with it.

However, once the finances are back on track and the borrower intends to buy a house again, the situation may not be in his favor.

Need to repair the credit history Borrowers have to reestablish a good record and it takes a long time to build up an ideal credit history. In normal circumstances, one must wait several years after a foreclosure to buy another house. However, there are some professional lenders who are empathetic enough to understand the definite reasons that led to the foreclosure. If the reasons depict the right intent of a homeowner, they can actually help him/her out to secure a second chance and buy a home.

For example, after the 2008 economic crisis, many people were rendered homeless due to job losses. This was a situation where these jobless people could not afford to make their regular home mortgage loan payments. However, they could not be held responsible for the crisis. In such circumstances, any conventional lending company would not consider the facts behind a homeowner’s inability to make timely payments. Instead, they would outright reject his loan application for the purchase of a new house.

There are some lenders who take note of actual facts behind foreclosure. They help borrowers to become proud homeowners again; they provide all of the necessary assistance that can help borrowers secure a new home through easy procedures. These lenders serve as support pillars to help borrowers sail through their financial crisis and gift themselves the priciest possession – a home.

Checklist For Borrowers Re-Entering The Market After Foreclosure

“Where we love is home - home that our feet may leave, but not our hearts.”- Oliver Wendell Holmes

More than a roof, more than a shelter, more than a structure on a plot of land; our homes are built with love and commitment. A home is a place where we learn the most, love the most and it’s a place where we can be ourselves. During financial instability, people struggle to secure their most important asset, their home. Due to unforeseen circumstances, sometimes people have to sacrifice the security of their homes, and when that happens it becomes difficult to recoup and come to terms with life. The emotional distress during foreclosure and the process of shifting from your own home to a rented apartment is painful.

When luck and circumstances are not in our favor, we must make critical decisions. Sometimes this means that homeowners have to step out of a home that promises love, security and togetherness. Apart from the distress and the pain, there are serious repercussions that come from home loss. Damage to one’s credit score is imminent and distressing. For this reason, the previous homeowner will have to wait two to three years before re-entering the market to buy a home again.

When people approach lenders to buy a home for the second time, several factors are taken into consideration. Those who are planning to re-enter the market after foreclosure should consider the following before approaching a lender for a home mortgage loan:

·         Job stability: People who fell into foreclosure due to job loss have to prove their job stability before re-entering the market. Lenders look for job stability before granting a suitable home mortgage loan.

·         Saving attempt: After a foreclosure, it is important to rebuild savings to prove financial stability and the ability to make monthly payments on time.

·         Attempt to improve credit score: It is a difficult and time consuming process. A foreclosure can drop a credit score by about 150 points. On-time bill payments and keeping credit card balances below the maximum level help to regain the lost score.

·         A valid reason for foreclosure: If a foreclosure occurred due to a justifying circumstance such as job loss or unexpected medical bills, then the waiting period for a new home mortgage loan can be reduced.

Most importantly, it is important to explain to lenders the exact reason for foreclosure. Accordingly, lenders suggest an affordable home mortgage loan. Lenders try to balance affordability and equity to offer a sustainable program that is beneficial in the future. Lenders work as partners and suggest loans that can be transformed into performing assets. 

Source Via: www.1stalliancelending.com

Homeownership – Fulfillment of a Dream

After spending five years pursuing my career, working hard and saving my money, I felt it might be time to take that first big step into homeownership. The idea of buying my first home was overwhelming and a bit intimidating, not understanding the process and all that entailed, but still my excitement about having my very own place and my interest in building equity for my future was winning out. 

This was going to be, what felt like, a true transition into adulthood for me. I felt that finding the right lender to guide me through the process was very important. I really needed a lender, who I could count on to educate and prepare me for all that was entailed in getting approved for a mortgage as well as help me make sure I was getting the right loan for me. As a first time buyer, I had little equity and knew I needed something sustainable that I could manage and maintain for the long term. This was not a small step in my life and I wanted to do everything right.

Significance of Home for First Time Buyers: 

For first time buyers, a home offers shelter, security and much more than that. Here are a few benefits of home ownership for new buyers:

• Emotional satisfaction: Home ownership offers emotional satisfaction. It ensures security, pride and fulfillment.
• Stability: When we rent a home, there is an element of uncertainty, whereas owning a home provides financial as well as emotional stability.
• Build equity: With monthly mortgage payments, homeowners build equity in their homes.
• Tax benefits: Homeowners get to avail tax benefits.

There are some lenders who offer customized solutions, taking several aspects into consideration. Job histories, salary, credit score, payment record and other aspects are taken into account before offering a home mortgage loan, and the whole picture is considered. Personalized service helps ensure you are getting the correcy and sustainable loan that fits your situation.

Source Via: www.1stalliancelending.com