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Get A Chicago Home Loan after Foreclosure!
Besides the possibility of having nowhere to go after Chicago foreclosure and being publicly humiliated during an eviction, one reason Chicago homeowners may try and stay in a foreclosed Chicago house as long as possible is that they do not believe they will ever own a Chicago home again. After all, banks would never lend to Chicago foreclosure victims, right? Wrong -- and by keeping in mind a few simple principles and applying them for the first few years after losing a Chicago home, borrowers may find it quite painless to qualify for a new Chicago mortgage.
 
It is possible for Chicago homeowners to get a loan after Chicago foreclosure, but this is not to say it will be easy to qualify for a new Chicago mortgage right away. Banks may require at least a 35% down payment and offer interest rates above 10% if Chicago foreclosure victims try to qualify for a loan in the first months after the Chicago foreclosure. Thus, the best long-term strategy may be for former Chicago homeowners to work on improving the credit accounts they still have open, then taking out new small loans when appropriate, and finally starting a savings plan to work up to qualifying for a new Chicago home loan.

Just after a Chicago foreclosure, Chicago homeowners may have severely damaged credit, depending on how far behind they were in the Chicago mortgage and if they missed payments on other open credit lines. Borrowers who missed payments on credit cards, car loans, student loans, and other debt will have a more difficult time improving their credit than Chicago homeowners who fell behind only on their Chicago mortgage. This is because making on time payments on the other debt can serve to prop up a sinking credit score due to a late or defaulted Chicago mortgage.

There are numerous resources for Chicago homeowners to begin improving their credit scores, either through a third party that specializes in credit repair, or on their own through the use of self-help websites. A few common tips include keeping on time with all other bill payments, making small purchases every month and paying off nearly the entire balance (but carrying a small amount from month to month), and disputing directly with creditors or the credit reporting agencies old or inaccurate data that is still listed on the credit report.

It may take upwards of 1-2 years for debtors to improve their credit scores significantly after a Chicago foreclosure has taken place, even with the help of credit repair services. However, this period should not be focused on just increasing their score, but this time should also be used to begin a savings plan. When the time comes to apply for a new Chicago mortgage, it will be important to have some sort of down payment to offset the relatively recent Chicago foreclosure, and having an emergency fund with even a few hundred or thousand dollars in it can mean the difference between a small emergency and a full-blown financial hardship.

But another step former Chicago homeowners should take is to open up small lines of credit even after the Chicago foreclosure. Rates and payment terms may not be great (in fact, they may be downright lousy), but if they are able to keep these new lines open and make payments on time, this will reflect well on their credit histories. Of course, this is not to say that borrowers should take out dozens of loans just to show they can apply for credit and keep an account from being sent to collections, but paying off a few old accounts (whether charge-offs or just old closed accounts with remaining balances) and opening up new ones and keeping them up to date can positively impact the credit score.

Within a few years after the Chicago foreclosure, a family may be able to qualify for a new loan to purchase a Chicago home again. The most relevant factors will be how credit has been used since the financial hardship that led to the loss of the Chicago house, and how much the borrowers are willing to put down on their new Chicago home. In fact, banks may not loan anymore than 75-80% of the purchase price of the Chicago house with a Chicago foreclosure on the applicant's credit reports. So the savings plan may be the deciding factor and should not be overlooked when putting together a long-term plan to regain Chicago homeownership.

But a consistent plan of credit repair, maintaining a good history of credit use, and saving up for a down payment can have remarkably positive effects for people who faced Chicago foreclosure just a few years ago. A Chicago foreclosure does not indicate that it is impossible to get another Chicago mortgage, but it does mean that it will take more work than usual on the part of the borrowers to prove they are credit worthy and deserve a second chance to be given a loan to purchase a Chicago house. As well, the more they save up and put down on the new Chicago home, the more they own that Chicago home, and the more resources will be available to them in case they face another hardship in the future.