Losing your home to foreclosure is likely to be at the bottom of a homeowner’s wish list. Just the sound of the word "foreclosure" has a negative connotation; however, your life doesn’t have to reflect that negativity if that is the path you have found yourself traveling.
It’s just like the old saying "when the going gets tough the tough get going". Here are a few tips on what to do in life after a foreclosure.
1. Get a copy of your credit report. For many, I know ignorance seems to be bliss, however when it comes to your credit, knowledge is power and that is something you need right now. There are several agencies like Equifax, Experion and Free Credit Report.com. These companies are here to not only let you know your credit score, but to also help you make repairs. Foreclosure on your home can cause your credit to take a significant hit and that is something that you need to confront as soon as possible. If you plan on ever making another purchase of a home or car and you don’t have enough cash on hand to pay for it, then your credit score will determine whether or not you qualify for financing.
2. Start an emergency fund. An emergency fund is an account where you have 3-6 months of your living expenses saved. That is, 3-6 months of mortgage, car payments, utilities and other monthly necessities saved so you have the cash on hand if you need it. If everyone had emergency funds, then many foreclosures could be stopped or, at the very least, delayed.
3. Educate yourself as much as possible on personal finance and alternatives for the credit challenged individual. A simple search on the Internet or at your local library will lead you to a wealth of knowledge on budgeting, setting financial goals and options to buying or renting your next residence. After a foreclosure, it will be challenging to purchase another home and many people choose to take the "lease option to buy" route. Educate yourself on what a lease option is, how it works and how it will benefit you and the seller.
4. Put together your financial plan and stick to it. Decide your financial goals for the next 6 -12 months, write them down and put them in a place where you can view them regularly. You are more likely to achieve a goal that is written rather than just spoken. Recruit friends and family to help you stick to your goals when you get discouraged and reward yourself with something inexpensive for your accomplishments. Life will seem a little unsteady after a foreclosure, however in due time you and your credit will recover. If all you can remember is one thing from this article- don’t give up because there is life after a foreclosure.
