I bought a house a year ago. My tenants stopped paying rent and now the house is in foreclosure. How can I clean up my credit after the foreclosure, so I will be able to buy another home when I am really ready to take on the responsibility? –J. Barnes, Via the Internet
It’s possible you can save your home from foreclosure by writing to your lender. Explain your situation and provide the necessary financial documentation. In return, the lender may offer options such as a temporary suspension of payments, mortgage loan extension, or the ability to make a one-time payment to bring the mortgage current.
If your home falls into foreclosure, it will leave a negative mark on your credit report. But there are steps to get you back on the right track.
1. Rebuild good credit. Six months after the foreclosure appears on your credit, begin rebuilding by opening new lines of credit such as a major credit card and a charge card; pay the bills on time.
2. Take your time. Wait at least two years before applying for a new mortgage so you’ll have a significant time of rebuilt credit history to show.
3. Comparison shop for a mortgage. Check out several lenders and sites like www.lendingtree.com.
Also, read Surviving Financial Disasters: Bankruptcy, Foreclosure, Eviction, Auto Repossession, Excessive Debts and Much More by Tiffany R. Love (Petra Publishing Co.; $24.99).