Foreclosure Attorney Elgin IL – ASM Law
The notion of not being able to pay your mortgage and giving up your home is, of course, a difficult one. However, foreclosing on a home does not mean you’ll never be able to own a home again. In fact, sometimes the circumstances you’re in mean the smartest choice to foreclose and move on.
Options to Consider Before Foreclosing
Once foreclosure becomes a possibility, it’s advisable to first look at ways you may be able to avoid or delay it. Some of the most typical examples include the situations such as:
-You’re underwater or upside down on your mortgage loan. Consequently, you choose to sell your house to avoid foreclosure. Then, apply proceeds from the sale to pay your lender.
-You are already in the early stages of foreclosure and have some equity. This means your balance is less than the home’s value. You could then refinance your loan and develop a repayment strategy.
-As foreclosure draws nearer, you obtain approval from the lender to do a short sale. Proceeds go to the bank, which writes off the amount that remains. Although your credit score will drop, you avoid foreclosure. Generally, you’ll be eligible to reapply for a home loan in just two years.
-Instead of vacating your home, you choose to declare bankruptcy. As a result, you’ll buy yourself some additional time to get current on your debts. However, this has a very negative impact on your credit score.
There is a misconception among some homeowners that they may return their property to the bank. Unfortunately, banks do not want to take possession of properties in distress. Also, banks do not typically permit homeowners to exit without meeting financial commitments.
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When Foreclosure is Inevitable, Proceed Quickly
When you are unable make your monthly home loan payments, it might be time to move ahead with foreclosure. Particularly in the event you are underwater on the mortgage. Expedite the process by informing the bank you intend to foreclose and want things to proceed promptly. Indeed, the longer the foreclosure takes, the larger the ding your credit score shall take. As a result, the longer you’ll need to wait to begin repairing it.
Restoring Your Credit Score Following a Foreclosure
Once you make the decision to start anew, there are steps you can take to help rebuild your credit:
-Conduct a thorough review of your credit score reports to gain an understanding of why foreclosure happened. List measures you can take to prevent it from occurring again.
-Consult with a local credit counselor for suggestions on rebuilding your credit rating.
-Start paying down your debts and any credit card balances.
-Create a positive history of payment by staying current on all your bills.
-Establish a budget and stick to it. Remain within your financial means on all purchases.
When foreclosure appears to be your best step, navigate the process as quickly as you can. Another important step you can take is to talk to a Foreclosure Attorney Elgin IL. At ASM Law, we help people in situations very similar to yours to come through foreclosure with best possible outcome.
Before you know it, your foreclosure will soon be in your rearview mirror. You’ll soon be rebuilding your credit score, restoring your finances and saving for your next home purchase.
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Getting a Mortgage After a Bankruptcy Filing – Foreclosure Attorney Elgin IL
Regardless of whether you declare Chapter 7 or Chapter 13, recovering from bankruptcy is a challenge. It makes a obtaining a mortgage afterwards rather difficult. However, it is still quite possible with careful planning and financial discipline.
Entering bankruptcy shuts off the capacity to borrow funds or make purchases with credit cards. Furthermore, it drives your credit score down significantly. It does take some time to rebuild enough credit to the point you can obtain a mortgage for a home. Nevertheless, with adequate preparation, planning and patience it’s possible to get a mortgage. Following are a few guidelines for working towards homeownership and getting a mortgage after filing for bankruptcy.
Organize and Discharge
The first step is to discharge the bankruptcy. Without a doubt, lenders will not do business with you if you’re still going through bankruptcy or credit counseling. After obtaining discharge of your bankruptcy, it’s time to organize and review your credit score report. For example, if the score report reflects any debts that it should not, get in touch with the credit agency. Generally, they will make corrections promptly. Also, verify that there are no other errors on the credit report. You can get a free credit report annually from Experian, Equifax and TransUnion. In the event you do detect an error, report it online to the relevant agency.
Installment Loans and Secured Credit Cards
A speedy way to rebuild a credit score following a bankruptcy filing is to show creditors you pay your bills on time. A couple effective ways to accomplish this is with installment loans and secured credit cards.
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An installment loan entails making monthly payments consistently. For example, it may be in the form of a car, personal or a student loan. With an installment loan, you must simply keep making your payments on schedule. Eventually, this will help you qualify for a home loan after filing for bankruptcy.
A secured credit card provides a credit that is related to the funds you have on deposit at the issuing bank. As an example, if you have $400 to deposit with the bank, that limits your monthly credit to that amount.
Building Credit to Obtain a Mortgage Loan After Bankruptcy
There are several ways to repair your credit score. Some of the most effective, reliable methods include:
-Use just a minor portion of your available credit. Do not “max out” and do not apply for too high of a credit limit at once.
-Move cautiously as you restore your credit by making payments on schedule – or even ahead of schedule. If possible, pay more than the minimum.
-Remain at the same place of employment for a sufficient period of time.
-Eliminate any existing tax liens against liens.
You are probably familiar with the old saying “patience is a virtue.” When it comes to applying for a mortgage after a bankruptcy, that is certainly true. Generally, waiting for at least two years is ideal. It is possible to obtain a mortgage following bankruptcy sooner in some cases. But the terms and probably the interest rates will not be as attractive as they might be after two years. Because you may well be paying that loan for 30 years, it’s worth it to wait a better interest rate.
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A Few Suggestions for When You’re Ready to Get a Mortgage
After waiting and saving for two years, take steps to prepare before applying for a home loan. Your lender is going to request that you satisfy specific criteria before issuing you any money. For instance, they’ll look for a sufficient debt-to-income figure and financial stability. Certainly, some money in your bank account will obviously help too.
It’s also important to remember that a large down payment can carry a lot of weight. Try to keep that in focus during the waiting period and try to save as much as possible.