I had a foreclosure and want to own a home again. What should I do?

If you had a foreclosure but want to own a home again and are wondering what steps you need to take to get there, 1st Alliance Lending is here to help.  There are many steps you can take to get you back to homeownership. Here are few useful tips to get you started.

Evaluate Your Credit and Take Action

Many lenders only look at your credit score when evaluating a mortgage application.  1st Alliance Lending isn’t one of them.  We believe in evaluating the whole picture.  However, the fastest way to get back to home ownership is through the FHA Back to Work program.  This program requires you pay all rental-housing payments on time for a period of 12 months.  In addition you have to have a satisfactory rate of paying your other monthly bills (such as credit cards) on time.  Depending on your situation you may also need to reduce your debt amount.  If you meet the criteria for the Back to Work program you may be able to own a new home in as little as 12 months.

    • Here are some tips to help improve your credit:

    • Evaluate all of your monthly expenses and categorize by ones you really need and ones you want.  Things you really need should include things like food, rent, and electricity.
    • Eliminate items you don’t need.  Consider your cable, cell phone, magazine subscriptions, etc. as possibilities to eliminate.  Check your local library to see if they provide alternate entertainment options such as free DVD rentals or a magazine exchange program.
    • Consider contacting companies to see if you can reduce your bill or check into using an alternate company to save money.  For example your garbage company may be willing to reduce your bill or you may find an alternate company that is cheaper.  Check to see if you can reduce your auto insurance cost as well.
    • Avoid impulsive purchases.
    • Consider selling any items you no longer need or use.  Look into selling on online services such as Craigslist or EBay.
    • Eat at home and pack a lunch.  Eating meals prepared at home saves a significant amount of money.
    • Look at your debts.  Create a list of the amount you owe, the minimum monthly payment and the interest rate of each account.
    • Use money you save on steps 1-6 above to pay off debt with the highest interest first.  Keep making the minimum payments on all other accounts.
    • After the highest debt is paid off, next pay off the smallest balance.
    • Feel good that you are being proactive in improving your circumstance!
    • Keep alternating paying off the highest interest and then the smallest balance.

Even if you are only able to pay off a little debt at a time, every little bit helps so keep working at it.

Contact 1st Alliance Lending

Contact us at 1st Alliance Lending for assistance.  A loan officer would be happy to review your financial situation and let you know if we think you are ready to own a home again.  If not, we will help guide you on what you need to do to get there whether it is paying down your debt or fixing your credit. We are proud to be Back to Work Program Lenders and are happy to help you achieve your dream of homeownership.

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