“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.