How bad will a foreclosure hurt my credit?
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Good Luck!
It was not a great idea to begin with to get a $550K mortgage , with an income of 55000 and then pay interest only. A forclosure will screw up your credit pretty badly, but it's not something that can't be fixed. You might try selling anyway and paying off the remaining debt. That would not impact your credit the way a foreclosure would. If you do choose to foreclose, then get some credit cards and pay them immediately - this will help your overall rating.
really bad......
Foreclosures can have an impact for years on your credit report. Some clients have been able to secure new loans as early as 2-3 years with some higher risk loans. The best foreclosure (if absolutely necessary) is included in a bankruptcy. Seek qualified legal counsel, it's worth the peace of mind to see what you can do given your circumstances. At the last I checked (and it's been a while), a foreclosure could remain on your credit report 10 years. Most of the negative issues on your credit is protected by the 1974 Privacy Act and drops off after 7 years (from the last reported date).
As has been said, reestablishing good credit is essential for coming out of your foreclosure. You may have to start with secured credit cards, or something like that to get it going. One last word of advice; once you start the process of reestablishing your credit, don't have any late payments or failures in your credit or it will set a bad precedent.
Foreclosures are a HUGE blemish on your report. Almost as bad as a bankrupcty. You'll have to wait years before trying to secure a new mortgage. Wow. An interest-only loan? What made you decide to go that route? Not something I would have suggested to a homebuyer. Were you not quallified for a conventional, fixed rate at the time?
Am I correct in assuming your second mortgage is an ARM? From a credit standpoint, I'd try to sell it and cut your losses rather than take such a huge hit on your credit rating.
I wish you the best of luck!
Put your house up for sale. Obviously you will take a loss if it sells but it would be a better situation than what you're in now. I'm sorry to hear about your property value, that seems to be the national trend these days. Consider Bankruptcy, you can do it to either keep your house or let it go. There are income stips on CH 13 which is like a payback option but lets you start over with a clean slate on payments.
Talk to your lender, see if they will work out some kind of payment plan for you. I know some lenders are just differing all missed payments to back end of loan, they can't sell a bad loan, they have to keep it. They may work with you.
If it is going to foreclose, try and get an apartment first.
Pretty bad. It will be years before you'll get another mortgage and you probably won't get a good interest rate. You'd be better off selling it and taking a loss.
Very Bad Idea, Record will stays for a long period of time. You will have a hard time getting loan of any type or suffer high rates. Landlord usually run your credit report before they actually rent you the house, with a foreclosure on it i can't possiablly think of how you can rent a house. Other than that and most important is that Lenders have the right to collect money from you if they can not get the full amount of their loan. So after the forclosure, lender will still come after you for that $50,000 !! dont' be surprise.
Sorry, cant' really think of much to help you, but if you wanted to blame on someone, blame on the Loan officer who helped you qualify the loan with "STATED INCOME" even if you dont', and the real estate agent who made you believe that real estate prices will go up forever.
Good Luck
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