Foreclosure, unfortunately, brings many consequences and the fact that it causes your credit score to take a big hit is one of them. A foreclosure can cause your credit score to drop by as many as 200 points, and it can take years before you rebuild your credit to what it once was. Due to the fact that you are about to lose your home, you are likely thinking about renting an apartment or house, but a substandard credit score will make that difficult. Fortunately, today it is not as challenging to rent a home with a poor credit score, but following the tips below can help increase your chances nonetheless.
Find a Place Before Your Credit is Affected
The time to start looking for a new home is as soon as you know that the lender wants to foreclose on your home. After the foreclosure is final, it may just be a matter of weeks before it shows up on your credit report. If you can find a place to rent before this happens, the landlord will see your current credit score before it drops. Keep in mind, however, that any missed mortgage payments that led up to the foreclosure will still appear on the report.
Keep Current with All Other Payments
Not only will a foreclosure show up on your credit report, but any other payments that you missed or that were late will also appear after the company reports them to the credit reporting bureaus. Landlords may be lenient if they see a foreclosure on your credit history but there are no other delinquencies. If, however, you have a foreclosure and late credit card payments and missed utility payments, it is going to hurt your credit more, and landlords are unlikely to be as forgiving.
Make Sure You Can Afford It
Going through the foreclosure process is upsetting and stressful. You do not want to have to go through it only to lose your next home because it turns out you cannot afford it. The most important thing, perhaps, when looking for your new rental is to ensure that you can afford it. Generally speaking, you should not spend more than one-third of your income on your rent. So, if you earn $2,400 a month, you should be looking for a rental that costs $800 a month. This is not only important because it will protect you in the future, but also because a landlord may not rent to you if your monthly income is not high enough, even if they were willing to ignore the foreclosure.
Look for No Credit Check Rentals
Generally speaking, the bigger the apartment complex, the harder it is to rent units within them. This is because these large complexes are run by corporations that have very strict renting criteria. There is no room for discretion or judgment if your credit score is just a few points below what they allow, and they will not take other factors into consideration, such as the strides you have made to bring your credit score up.
To avoid this, consider looking for rentals that only have one landlord, and that is a person you will deal with the majority of the time. These landlords are less likely to run a credit check and, even if they do, they are typically more willing to hear your explanation and sympathize with it. Rentals that do not require a credit check can be found on Craigslist, in the local newspaper, and in local Facebook groups.
Pay More for Your Security Deposit
If it is possible for you to pay a higher security deposit than what the landlord is asking, that could also make them more willing to rent to you. Money really does talk and the landlord will likely see it as an act of good faith and trust that you can pay your rent. Also, paying a higher security deposit will give your landlord the confidence to know that even if you do not pay your rent, they are still covered for their losses. This, of course, does not mean that you should go for several months without paying your rent.
Ask Someone to Cosign
Cosigners allow you to make purchases you would not otherwise be eligible for because the cosigner becomes responsible for making the payments if you do not make them. As long as the cosigner meets the renting requirements of the landlord, you can rent anywhere you want, even the bigger complexes that have very strict criteria. Just remember that it is crucial to pay rent on time every month, or your cosigner will be liable for it.
Remain Honest About the Foreclosure
It is extremely tempting to simply not tell potential landlords about your foreclosure and hope that they simply will not notice. Unfortunately, it does not usually work that way. If they perform a credit check, they will learn about the foreclosure and will likely refuse to rent to you because you were not honest with them.
Any time a potential landlord asks if you have had a foreclosure, always tell the truth. Also make sure you tell them that you are now in a better financial position and explain the circumstances surrounding the foreclosure. If you can show that the factor that caused your foreclosure is not going to keep you from paying your rent on time, a landlord will be much more willing to rent to you.
Our Florida Foreclosure Defense Lawyers Can Help with Your Case
Of course, the best way to ensure you do not have problems renting a place is to not lose your home to foreclosure in the first place. If you are facing foreclosure, this may seem like an impossibility to you, but it is not. At Loan Lawyers, our Fort Lauderdale foreclosure defense attorneys know the valid defenses to use in foreclosure cases, so you have the best chance possible of keeping your home. When you need legal help, call us at (954) 523-HELP (4357) or contact us online to arrange a free consultation.
For more information about foreclosure defense please visit our website at: https://www.fight13.com/practice-areas/foreclosure-defense/
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.