When a foreclosure is imminent and you know you will lose your home, you must take the time and put aside the resources to find a new place to live. The foreclosure process varies from state to state, and you could have from 30 days up to a full year to look for new housing. Your credit will be damaged and buying a new home will be out of the question for a few years. You will have to plan on renting a home or living with friends or relatives until you get back on your financial feet.
Look for a Rental
Think about how much space you will need. Renting an apartment instead of a large home may be more practical, even if you have relied on a certain number of bedrooms and bathrooms. Many people downsize from a house to an apartment after a foreclosure. Next ,consider your budget. You will need to rent a place you can afford. If you lost your home because you could not meet your $1,200 per month mortgage payment, find a place to rent that is significantly less.
Prepare to negotiate with landlords. A foreclosure on your credit report might make landlords reluctant to rent to you. Be honest and upfront, especially if there were extenuating circumstances such as a divorce or a job loss that led to your foreclosure. You can also expect to pay a higher security deposit. If you are approved for an apartment, townhouse or rental home, you might be required to pay a higher security deposit. Some landlords will require an extra month's rent.
Ask someone to co-sign your lease. Some landlords may refuse to rent a place to you unless you can come up with a co-signor who can guarantee the rent. Talk to parents, close friends and other people in your life who might be willing to co-sign your lease. Finally, talk to your lender. Some banks allow their borrowers to rent the foreclosed homes back from them until it is sold at auction. This will buy you a little extra time to find a place to live.
Apply for Housing Assistance
Contact the U.S. Department of Housing and Urban Development. You will be connected to a housing counselor who can assist you in finding a place to live after foreclosure. Find the HUD office in your area by visiting hud.gov. You can also call HUD at 1-800-955-2232 and talk to the HUD counselor responsible for homelessness if you are in danger of becoming homeless after foreclosure. The HEARTH Act passed by Congress in 2009 gave HUD additional resources and oversight to prevent people from becoming homeless after a foreclosure.
Contact your local housing authority for help. Many cities, towns and states have local and regional offices that can help you locate emergency and long term housing.
Inquire at your church or by visiting other community groups. There might be people willing to rent you a home at a reasonable cost or provide help in finding housing. There are nonprofit organizations in many communities such as Habitat for Humanity, Housing Assistance Council and Mercy Housing, which help people find or build homes.
Begin rebuilding your credit immediately. If you want to buy a house again in the future, you will need to establish a record of financial responsibility following your foreclosure.
- Begin rebuilding your credit immediately. If you want to buy a house again in the future, you will need to establish a record of financial responsibility following your foreclosure.
Cari Oleskewicz is a writer and blogger who has contributed to online and print publications including "The Washington Post," "Italian Cooking and Living," "Sasee Magazine" and Pork and Gin. She is based in Tampa, Florida and holds a Bachelor of Arts in communications and journalism from Marist College.