Having a past foreclosure can make it harder to rent an apartment, but it’s not impossible. Landlords in the post-recession era aren’t as strict as they were previously which, hopefully, means you shouldn’t have a tough time renting after foreclosure. Follow these tips to find a rental.
Rent Before the Foreclosure Hits Your Credit
Depending on how foreclosure works in your state, the actual foreclosure may not show up on your credit report for a few weeks. If you apply for an apartment before the foreclosure is updated on your credit report, you have a better chance of getting approved. (Late payments leading up to your foreclosure will probably still show on your credit report.) Timing it is tough since most people don't realize foreclosure is inevitable until it's happening.
Protect Your Other Credit Accounts
Keep the damage to your credit as minimal as possible by keeping up with payments all your other accounts. You may be able to explain away a foreclosure, for example, maybe your interest rate adjusted and your payments suddenly became unaffordable. It’s not as easy to convince a landlord to rent to you with foreclosure and multiple other delinquency histories. Don’t give up on your credit score just because the foreclosure is in process.
Make Enough Money
Landlords mostly want to avoid troublesome tenants who continually pay late and especially those who have to eventually be evicted. You need to make enough money to comfortably pay the rent and your other monthly expenses.
As a general rule of thumb, look for properties with rent that’s no higher than three times your income—$800 if your monthly income is $2,400 for example. If your rent is higher than that, you may not qualify, even if the landlord would otherwise be willing to overlook your foreclosure.
Find No Credit Check Apartments
Large apartment complexes are typically owned by companies that have strict approval criteria. You're more likely to get a credit check at one of these complexes (and denied if you have a foreclosure) so don’t let these be your first choice.
Instead, look for houses, condos, townhomes, duplexes, and small apartment buildings that are owned by a single landlord. These types of landlords are less likely to do credit checks. Look for these types of apartments advertised in the local newspaper, Facebook trading groups for your area, Craigslist, or ask friends and family for recommendations.
Pay a Higher Security Deposit
Money talks. If you're able to pay a higher security deposit it may help you get into an apartment. Giving your landlord a higher deposit lets them know you're serious about paying your rent.
Not only that, a higher deposit lets the landlord cover losses if you decide to break your lease without notice. But, that doesn't mean you can skip a few months of rent. You're still responsible for paying your rent on time each month unless your rental agreement says otherwise.
Find a Cosigner
You can get approved for an apartment, even one of the larger apartment complexes if you have a cosigner or guarantor who meets the credit qualifications. Keep in mind that you, as well as your cosigner, will be responsible for any unpaid rent or damages to the rental unit when you move out.
Don't Lie About Your Foreclosure
"Don't ask, don't tell" may seem like a good philosophy to follow when it comes to renting after you have experienced a home foreclosure. However, lying about the event will likely cost you a rental. If you're asked if you've ever had a foreclosure, be honest. Explain the situation and focus on how you've turned your finances around. Make sure the landlord understands that what caused the foreclosure won't cause you to be late on your rent.