Rebuilding Your Life After A Foreclosure

Life after a foreclosure can be filled with lots of doubt about what the future will hold for you and your family

. Losing a home can be very devastating and is hard to recoup from. Life however does and will go on for better or worse. You can make rebuilding life after a foreclosure a beneficial learning experience that will prepare you for a sound financial future if you are willing to commit to regaining your stability.

For those seeking to move on after a foreclosure one of the first steps needed is to reassess finances. Either a mismanagement of money or an unfortunate loss of income may have been the cause of the foreclosure. Taking on a home that was too expensive, falling behind on the mortgage repeatedly or loss of a job and lack of savings to accommodate are all reasons why so many people end up losing their homes.

Learning to manage ones finances is the key to rebuilding ones life after foreclosure. Set up a budget that allows you to live beneath your means. When renting or leasing a new home or apartment choose a place that is no more than 28%-30% of your net monthly income. This calculation is used by many home lenders to determine if a person can afford a home and still live comfortably.

You should use these numbers as a guide for obtaining affordable housing. Minimize luxury expenses while trying to reestablish yourself. If you must have cable television, internet and other optional services opt for the minimal services to keep expenses low.

Work on improving your credit and building a savings. Having good credit could have helped in avoiding a foreclosure. People with decent credit are able to refinance to make their mortgages more affordable and if you werent able to do this because of your credit you should consider serious credit repair. The only true way to repair credit under any circumstance is to pay off negative balances and begin paying bills on time. Good payment history over a period of time will gradually improve a damaged credit report due to foreclosure. In addition, establishing a savings is also necessary. Having reserve funds for a rainy day helps people get through rough periods such as a job loss. Having such funds can be the determinant factor as to whether you can pay a mortgage or not. For security purposes having three to six months of living expenses in a savings account is advisable.

Once you are able to live on a budget that allows you to live beneath your budget and you are making an attempt to reestablish credit and build a long term savings you can possibly consider purchasing a home in the future.

by: Rudy Haynes

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