Homeowner Toolbox

• Avoid Foreclosure
• Government Programs
• Loan Modifications
• Personal Credit
• Frequently Asked Questions

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Once you have delinquent mortgage payments appearing on your personal credit profile, your credit history and score will be adversely impacted. The damage to your credit profile gets progressively worse as the missing, late or irregular payment pattern persists.

Late Mortgage Payments: If your payment is more than 30 days late, the three major credit bureaus will probably be notified and your late-payment history will show up on your credit profile. However, if applying for new credit or a mortgage, banks typically look at your payment history for the past 12 months and you need to make sure you are in good standings during this time.

Short Sale: This will reflect negatively on your credit profile. However, most lenders will consider lending to you again two years and one day after the date of the recorded close date of the Short Sale. Just be sure your payment history for the 24 months after the Short Sale is perfect!

Foreclosure: This is an extremely negative reflection on your credit profile and something you never want. The negative impact of a foreclosure will remain on your credit for at least 7 years and in some instances, even longer. Most lenders will not consider your application for a new loan once they see a foreclosure on your credit profile.

There are many credit profile management websites such as creditkarma.com, creditreport.com and others to be sure, can help you stay up-to-date on your credit and score; and offer tips on maintaining and improving your credit.

What about the Bankruptcy Option? Some people mistakenly believe a bankruptcy will somehow save their home. The reality is much worse and most of the time can be more devastating than just the foreclosure. The bankruptcy process transfers control of your estate (or at the least the part of your estate subject to the rules of bankruptcy) to the bankruptcy courts. The judge then decides how much you have in assets (cash, property, real estate) and how much you have in liabilities (secured debts like mortgages and car loans along with unsecured debt such as credit cards). From there the judge decides which assets will be converted to cash and develops a list of creditors to be paid off. Oftentimes, your most valuable asset is the house and the best source of cash (once it is sold) to pay off other creditors.

Time will mend everything on your credit profile, even foreclosure and bankruptcy. The longer you wait, the longer you continue with your financial struggles - the longer it will take to fully recover. Start your recovery today!