Eviction. This is a scary word for many people, especially if you are trying to look into the possibility of purchasing a house. Understanding how evictions will affect you and your credit is vital in being able to move forward and purchase a home in your future.
Contrary to common belief, evictions will actually not show up on your credit score. While this may be a huge sigh of relief to some, this unfortunately doesn’t mean that you’re in the clear. When it comes to renting a home, oftentimes other consumer reports will show the eviction, or the new rental property may require proof of positive rental history, something that an eviction does now allow. Because of this, your chances to rent another property may be difficult unless the eviction has been settled.
While the eviction as a whole will not hurt your chances of purchasing a home, the amount that you owe from the eviction will show on your credit report as an unpaid balance or collection. This balance is what will make being approved for a home loan harder if left unpaid.
If you set up a payment arrangement through the management company to pay off your debts, oftentimes you may not even see the eviction show on your credit whatsoever, this means you won’t have a collection or unpaid balance shown when trying to purchase a home. Ultimately, if at all possible, you should try to either set up payment arrangements immediately following the eviction, or if you are unable to do so, try to pay off the uncollected rent amounts and fees prior to applying for a home loan.
While the eviction itself isn’t reported on your credit, by carrying that unpaid balance over, your chances of being approved for a home loan dwindle tremendously. If you have not set up payment arrangements or paid on the uncollected balance, the collection will show on your credit report for up to 7 years which can make purchasing a home rather tricky.
In conclusion, you can indeed purchase a home after an eviction, however, if you have any unpaid balances tax a result, you may be required to pay the balances in full and provide proof of doing so to your mortgage lender in order to obtain approval to move forward with your Real Estate purchase.
If you’re currently searching for a new home, are ready to sell your property and in need of a qualified seller’s agent, or if you have any questions regarding New York Real Estate, please feel free to contact our office at any time.