Despite common belief, a home foreclosure doesn’t completely ruin the ability to overcome future financial hurdles. Landlords and rental property owners are often willing to work with individuals who have fallen behind on mortgage payments in the past.
To increase the odds of being approved for a rental application, consider these seven steps.
1. Use Online Search Tools
There are many online resources to help recently foreclosed individuals secure good rental properties. Zillow allows prospective renters to search for apartments online within desired neighborhoods, budget constraints and sizes. Decide the most affordable rate based on current financial status and living necessitates. Avoid stretching a budget for excessive accommodations, even if accustomed to certain standards. While convenient, spending extra for a pool and gym is not practical on a tight budget after a home foreclosure. Reestablishing financial responsibility should be the number one goal.
2. Offer a Large Down Payment
A landlord may be more inclined to accept a rental application with a heftier down payment, especially when the applicant has a recent foreclosure on his or her background. Not only do large deposits display a willingness to shell out extra cash, they give landlords a bigger safety net in case renters fall through on their payments. With larger down payments, landlords have peace of mind to take a chance on applicants without credentials because they are protected by the deposits.
3. Start Soon
It takes times for a foreclosure to officially show up on a credit report. If possible, sign a lease before the foreclosure information is processed. Missed payments have probably already been reported to credit bureaus if homeowners have been in default for more than 30 days. Be prepared to explain an undesirable financial history when approached by property management.
4. Keep Other Finances in Order
Foreclosures are often outcomes of multiple monetary problems. If possible, try to continue paying all bills on time to reduce the negative impact of the bank’s repossession. If a prospective tenant can explain to a landlord how mortgage default was an isolated event, they may be more forgiving during the application process.
5. Find an Apartment with No Credit Check
Smaller, privately-operated properties are good options for renters whose credit scores were diminished by foreclosures. Those who have been consistently denied can turn to these types of homes to guarantee future living arrangements. Consider condominium, townhouse, duplex or single-family home rentals that don’t require credit checks during the background screening.
6. Enlist a Cosigner
Ask a friend or family member to put his or her name alongside the leasing candidate. A cosigner takes responsibility for monthly overhead should the live-in tenant fail to pay. Keep in mind, the cosigner is essentially putting his or her good credit standing on the line. The payment liability falls onto the cosigner if the lessee breaks the agreement or does not pay rent on time. Knowing close friends could be negatively impacted by missed payments should prompt renters to be more cautious when budgeting for rentals.
7. Look at Other Options
Check out extended stay hotels as a last resort. They do not require credit checks or large deposits. Based on the longevity of the stay, residents may be able to negotiate costs. Plus, hotels often have amenities not offered in typical rental units.
Don’t stress over where to live after a foreclosure. There are many options available for those with negative credit history. After securing a rental property, foreclosed homeowners should try to increase their credit scores to avoid future issues with rental application approvals or home purchases.
This post was written by Tali Wee from Zillow.com. Would you like to write a guest post for The Dime? Email us at firstname.lastname@example.org.