Problems with Foreclosure
It is no secret that foreclosure can be a very difficult and lengthy process filled with plenty of uncertainty. The prospect of losing your home can be a bit difficult to grapple with. It’s a financial dilemma that has numerous resolutions dependent on your particular situation and set of circumstances. The decision to foreclose is not at all easy and should be made with careful consideration.
There is an abundance of reasons why one may be considering foreclosing on their home. One of the most common reasons would have to be divorce. Divorce has the potential to complicate most areas of your life and owning a home is not excluded from these potential complications. The terms of a divorce may force one of the former spouses to become responsible for the house, and they may face deep struggles with trying to make payments. Another reason one may consider going the foreclosure route is in the instance of illness. In fact, illness is reported to be the number one motivator behind the decision for most to walk away from their homes. An illness is a huge financial burden and can quickly make it to where the owner simply cannot keep up with their mortgage payments.
You may be of the belief that foreclosing is a cut and dry process, but there is margin for error. The biggest trouble that comes up as a result of foreclosing is the effect that it has on your credit score. As you can imagine, falling behind on your loan doesn’t do wonders for your credit score. The foreclosure will be on your report for at least seven years after the process has been completed. Upon this happening, you may find that it is more difficult to qualify for a loan, as lenders aren’t as confident in your ability to pay back that loan. Furthermore, if you are qualified for a loan, don’t at all be surprised that your interest rates are now astronomical. Those with bad credit are often subjected to very high interest rates.
Another big issue that isn’t discussed nearly enough is the fact that you may soon have some serious tax issues on your hands. Federal income tax issues aren’t something that you want to experience, but it is a very real concern for those who foreclose. This is directly tied to the fact that you will still be on the hook for the income tax on the remaining mortgage balance. This issue can be avoided by making an arrangement with your lender.
Rest assured that once you go through with a foreclosure, any applications for a home loan in the future will be looked over with a fine-tooth comb. Manual underwriting may also be utilized. All your financial decisions will be taken into account resulting in a much longer time period to find out whether or not you qualify for the loan. These are just a few examples of the top problems faced by people in foreclosure.
It is clear that no one ever buys a home with the intentions of having to foreclose. It is by far one of the most nerve-racking financial situations to be in. It should ultimately be avoided at all costs and be the final consideration. Luckily, there is a solution for you! We are a real estate investment and solutions company located in beautiful Orange County, California. We purchase homes in any condition and pay handsomely in the form of cash. We would love to assist you and help you avoid foreclosing and all the detrimental effects that come along with it. Please feel free to pick up the phone and get in touch with us at your earliest convince!