How to Rent After a Deed in Lieu
Renting after a deed in lieu of foreclosure is common because people in this situation typically can't qualify for a new mortgage loan. A deed in lieu works by giving a lender possession of a house. Also referred to as a voluntary repossession, a deed in lieu is an option when owners face imminent risk of home foreclosure. A deed in lieu bypasses the foreclosure process and allows owners to sign over the title to their home loan lenders. Having a deed in lieu in your past can hurt your credit, but renting is possible.
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Instructions
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Start with your mortgage lender. According to Fannie Mae, some home loan lenders allow original owners to temporarily remain in the house after a deed in lieu as renters. The home loan lender re-evaluates the house payments, and then decreases the rent to a price that's affordable.
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Submit an explanation with your rental application. Bring up the deed in lieu before your landlord discovers the information on your credit report. Be up-front and supply a thorough explanation for past mortgage problems. Job loss, illness or divorce can move landlords to give you a second chance.
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Get a rental before your mortgage company reports the deed in lieu. Begin looking for an apartment or house to rent immediately after your mortgage company approves your request for a deed in lieu.
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Put another person's name on the lease. Ask someone to co-sign your new rental lease to help you qualify after a deed in lieu of foreclosure.
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Qualify with a bigger security deposit. Some mortgage companies assist owners after a deed in lieu and provide $3,000 for relocation expenses. Use all or a percentage of this money for a larger security deposit on the house or apartment rental to compensate for credit damage.
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