According to data from LendingTree, more than 600,000 homes were in foreclosure last year. In 2010, it was 2.9 million.
How does this affect your credit score?
According to new data compiled by LendingTree, initially, your credit score could drop by as much as 150 points.
However, 7 percent of borrowers continue to have a 680 Beacon score by the end of the year, and a low 2 percent end a foreclosure year with a score above 740.
Approximately each year after your foreclosure, your credit score can increase by about 10 points. The average credit score after foreclosure for a one year period was about 605, and after five years, 640.
The definite downside is mortgage interest rates.
Buyers even with a strong 740 credit score within two years of a foreclosure, still paid a higher average rate of 5.02 percent when compared with those who either never had a foreclosure – or at least not in the past seven years. The latter paid 4.7 percent.
Facing foreclosure? A bankruptcy, loan modification, or deed in lieu of foreclosure may be the right option for you. Contact attorney Alex Hernandez for your free consultation.
Representing clients in the areas of Chapter 7 Bankruptcy, Family Law/Divorce, and car and motorcycle accidents for 20 years.
(904) 712-5565 or (305)-688-LAWS (5297).
*Se Habla Español