What is a foreclosure?
Simply, a foreclosure is the legal process by which a lender seizes and sells a home or property after a borrower is unable to meet their repayment obligation.
Buying a home and borrowing the money to buy the home through a lender is called a mortgage. Foreclosure is the legal process by which a lender attempts to recover the amount owed on the mortgage loan, by taking ownership of the mortgaged property and selling it.
- Typically, a default is triggered when a borrower misses a specific number of monthly payments.
- It can also happen when the borrower fails to meet other terms in the mortgage document.
- A foreclosure remains on a Credit Report and Rental History Report for 7 years.
<aside>
<img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/43957ad6-0457-44d9-b0c7-ae1655b211fb/Green_Logo2.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/43957ad6-0457-44d9-b0c7-ae1655b211fb/Green_Logo2.png" width="40px" /> Lighthouse: Tips For Foreclosures
- Know your credit score and what is on your credit report before contacting a property
- Apply for a lease before the foreclosure hits your credit report
- Look for “No Credit Check” properties
</aside>
What are apartment requirements for renters with foreclosures?
Each apartment complex has its own criteria for accepting new tenants with a foreclosure.
- Many apartments will charge you a larger deposit when you have a foreclosure, so be prepared to pay up to 1-2 month’s rent as deposit. This allows for the higher risk apartments to take accepting tenants with a foreclosure in their history.
- Some apartments do not accept foreclosures. Those that do, tend to treat them the same as broken leases. If it is older and paid off, chances are higher.
- Some apartments may require that you have a co-signer.
Renting before the foreclosure?
It’s easier to qualify for a rental before the foreclosure hits your credit report than it is to rent after foreclosure notes are added to your report.
- You might have the income but be below water on your house.If you have the means and the timing is right, sometimes it makes sense to move well in advance of the foreclosure auction.
- Whether this is a smart option for you depends upon the number of missed payments, your lender’s reporting policies, your individual financial circumstances, and the prospective length of the foreclosure process for your property.