Once you have gone through the emotional stress and traumatic process of foreclosure on your home, you may wonder, “hat next?” There is life, a good life in fact, after this financial disaster!
First, put it all behind you and begin with a fresh new start. As with other past stumbling blocks in your life, you must learn from them and move forward. Write down what caused you to get in that situation, whether it was from the housing market, a loan you could not possibly have fulfilled, overspending, not sticking to a budget, making poor decisions, etc. This will give you peace of mind and help you avoid the same scenario again.
The next step is to create a budget. It should be realistic and one you can stick to. Set financial goals and develop a path to reach them. In order to reach these goals, you may have to give up some of the extras in your life. Create a chart to track cash flow coming in and going out. One of the biggest challenges facing you in the coming months will be sticking to your budget!
If you are struggling to pay your bills, it may be advisable to seek help from a financial adviser. They might be able to negotiate a repayment plan for debts that you owe. This will probably have a negative effect on your credit report, but it is better than bankruptcy.
You need somewhere to live, so consider renting a place while you focus on building your credit and cash resources. Generally you need to wait 24-36 months from your foreclosure date before considering purchasing a home and acquiring financing again.
A rent to own or lease option is another consideration. This will give you the ability to gain equity in the home and build a payment history that will help in the future with credit reference.
During this rebuilding time in your life, you must remember to live within your means. Adjust your spending according to your income, and save 10 percent of what you make. This will prevent you from slipping backwards in your credit rating again.
If you have cut back on your expenses and are still finding it difficult to pay your bills, consider ways to earn more money. If you are able, consider a second job. If you have other talents, think about doing freelance work. Check with your employer for extra shifts that pay overtime.