Even though foreclosure activity declined by 9% in April, scores of individuals and families in America are still being forced out of homes they can't afford. If you're one of these unlucky individuals, you'll likely need to find a rental after your foreclosure. And that means finding a landlord who won't put too much weight on the fact that your former home was foreclosed.
Remember that most landlords and apartment companies will run your credit report and review your credit history when you submit a rental application. The foreclosure may show up you on your credit report and could work against you when you are looking for a new place.
To get the apartment or rental home you want, use these tips to find a rental after foreclosure:Investigate apartments online.
In recent years, a number of online apartment rating services have flourished, making it easier for prospective tenants to learn a lot about a housing unit prior to even seeing it in person. So before you hit the pavement to go apartment hunting, use a service like ApartmentRatings.com or ApartmentSearch.com to discover everything from how much the rental units cost each month to whether an apartment accepts pets.
Some sites also show comments posted by others about the apartments – including viewpoints on how safe the neighborhood is or how responsive management is to fixing problems. After a bit of online sleuthing, you should be able to weed out higher-priced places you know you can't afford. There's no sense in going from one costly housing situation to the next.
Offer a higher deposit.
Some landlords may take you more seriously if you offer a higher-than-requested deposit. Do what you can to prove that you have funds available to pay your rent on time, and the foreclosure on your credit history may not hurt you as much.
Since it's taking much longer now for banks to repossess homes, perhaps you have the option of what's known as squatter's rent available. If so, giving the landlord a higher deposit means the landlord can adequately cover any losses if you end up breaking your lease agreement. Give your landlord some peace of mind, and you may find it much easier to secure the rental property you want.
Find a co-signer.
Having someone with a stellar credit score and positive credit history co-sign your rental application can make it easier to get the house or apartment you want. Landlords may look past your foreclosure if you have a strong, creditworthy co-signer because a co-signer acts as a guarantor on the rental agreement; if you default, they're responsible for paying the amount due.
Having a co-signer means you should be sure to get an apartment with reasonably priced rent – preferably far less than whatever your home payment was. You don't want to have a family member of friend co-sign and put their credit on the line for you, and then regret their decision later if you can't afford to pay your rent.
Time your rental application.
Apply for an apartment right before, or shortly after, your foreclosure occurs. Since it takes some time for your foreclosure to show up on your credit report, if you can secure an apartment before this information gets on your credit report, you won't have to jump through hoops to have your application approved. Of course, if you're already 30, 60 or 90 days or more behind on your mortgage, this information has likely already been reported to the credit bureaus. Thus, a landlord may want an explanation of why you're behind on your house payment.
Keep the rest of your credit in good shape.
Even though you may have lost your home to foreclosure, it's possible that you may have had the financial wherewithal to keep up with your other bills. To the best of your ability, try to continue paying all your other bills on time to reduce the chances of doing even further damage to your credit score.
While you won't have perfect credit after a foreclosure, a landlord may accept your explanation that your home was simply too costly if you can demonstrate that the missed housing payments were isolated events – and that you did manage to pay all your other financial obligations. Once you do secure a rental, keep a tight rein on your budget and expenses to get your finances back on track. Don't think for a minute that keeping up with rent is any less important than paying a mortgage. They both matter greatly. In fact, credit bureaus are now tracking rent payments, too, just as they track how consistently you pay your mortgage.
Search for "no credit check" apartments.
Some apartment companies offer rentals without performing any type of credit check. If several landlords have turned you down because of your poor credit history, consider looking at these smaller properties to secure your new place.
Also, individual property owners who are renting condos, townhouses, duplexes or single-family homes may be more lenient than big property management companies. "No credit check" rentals are typically listed on Craigslist, community bulletin boards and in your local newspaper.
Consider non-traditional housing.
If all else fails, you could try lodging at an extended stay, or long-term, hotel. These places don't require credit checks or big upfront deposits. You may also have wiggle room in negotiating a reduced monthly charge based on how long you'll stay.
It wouldn't hurt to ask for a discount on the monthly rate if you'll be there for longer than, say, three months. If you'll be living there for six months or so, use the time to save money and build your credit rating, which will position you to be accepted by a traditional landlord.
7 Secrets for Finding a Rental After Foreclosure