Dealing with a foreclosure can be devastating, financially and emotionally. Even after the foreclosure, recuperating can be long and difficult path. The stress from a foreclosure can put people in a state of mind that is less than helpful for the process of financial recovery.
Because of this, one of the most important first steps is to take care of your physical and emotional health. By keeping a clear, stress free and lucid state of mind it will be much easier to take steps to regain financial freedom. Don’t lose hope; foreclosure is a powerful learning experience and there a several ways to pick up the pieces after foreclosure.
Finding a Place to Live
The first and most important step to take after foreclosure is finding a place to live. Because of the recent foreclosure this may seem like a difficult task, however, try and keep a calm and clear state of mind as it will help the process dramatically.
The biggest problem when looking for a new place to live is the cash needed as a down payment on a rental home. Some property owners may ask to double the deposit if they find you have had a recent foreclosure; some may outright deny the application.
Because of the difficulty of getting a rental deposit it is best to save money prior if foreclosure is inevitable, though this is not always possible. This process of procuring a rental deposit can be difficult and it may be necessary stay at a much cheaper location for a period of time after a foreclosure. This will assist finances dramatically.
After suffering through a foreclosure, credit score will often take a large hit. Although this isn’t as important as finding a place to live, it’s smart to start building a better credit score immediately. This can often take a long period of time.
Take an account of all necessary and unnecessary expenses and ensure that you maintain a positive flow of money; sadly this may mean cutting back on fun activities and things such as food expenses.
Regaining Financial Freedom
Although foreclosure can be devastating, it is a very powerful learning experience. After foreclosure a large portion of people are able to recover their financial situation dramatically, although it usually takes some time.
The best way to recover is to either make more money or cut back on expenses. This can be difficult if one is used to a particular standard of living, however, it is absolutely imperative in order to avoid a similar situation.
After foreclosure the primary goal should be to ensure that every month more money comes in than goes out. Although this is a very simple statement it is also a powerful way to get finances in check.
It may take four or five years before one is able to purchase another home, in this time the best choice is to focus on having a positive asset-expense ratio. Even if only able to save 10% of the total income each month, it will be a huge benefit.