How Does Foreclosure Affect Your Credit

Going through a foreclosure is probably the most stressful experience for any homeowner. You may not only lose your property, but a foreclosure will also have a negative impact on your credit score. In this article, you will learn more about how foreclosure affects your credit score and how to avoid foreclosure.

What Is the Impact of Foreclosure on Your Credit Score?

Foreclosures typically happen after a few months of missed payment, or about 120 days after the delinquency of the payment. 

A foreclosure decreases the credit score by around 100 points and does not allow you to get a new loan in the future, although the variables can change. Additionally, because a credit score is impacted by missed payments, it will be significantly lowered before the hit from the foreclosure. The foreclosure will stay on your credit report for seven years from the day you first missed a mortgage payment.

If you are thinking of becoming a homeowner again in the future, you will have to wait at least three years before you can be approved for a new mortgage loan. The exact waiting time depends on the mortgage lender. This stigma from lenders due to the foreclosure is in itself a major blow, on top of having a long road to a recovered credit score.

How to Avoid a Foreclosure?

Even if you are behind on your mortgage payments, there are still ways to avoid foreclosure. They include a loan modification, completing a short sale, signing a deed in lieu, claiming bankruptcy, refinancing, and some others. Most of these also come with their own negative consequences, but there is a way to get out of foreclosure with the ability to preserve your credit score and continue to be eligible for loans.

Sell It to a Cash Home Buyer

One of the most effective ways to avoid foreclosure with minimal negative consequences is to sell your home to a cash home buyer. The best thing about this option is that you can sell your house fast. Usually, you can close on a deal within two weeks. Moreover, cash buyers purchase properties as is, meaning that no repairs, upgrades, or even cleaning is required.

Sell Your Home to Purple Mountain Holdings

If you own a home in Colorado Spring, CO, or any other nearby area, and you are at risk of foreclosure, Purple Mountain Holdings is ready to help you avoid this unfortunate situation. We buy houses in any condition and under any circumstances, including pre-foreclosure and foreclosure. Our company is the leading cash buyer in the state of Colorado, so you can definitely count on us.

If you have any questions about the home-selling process or our company, feel free to reach out to us. We are always ready to answer your questions and provide you with the information you need.