Disadvantages Of Being Foreclosed

What is foreclosure? Foreclosure occurs when you are unable to pay your mortgage and your lender sells the house or property securing the mortgage to cut their losses. Obviously, for any borrower, a foreclosure is a negative event but the full extent of the effects of a foreclosure may not be as so easy to ascertain. Avoid foreclosure by contacting us and let us short sell for you.

Harder to Find a New Home

Borrowers who go through a foreclosure often face the problem of not having enough cash to pay a rental deposit or the credit rating to get another mortgage. In fact, most lenders and mortgage insurers, short sale realtor including Fannie Mae, will not give a loan to a borrower with a foreclosure in the last 5 years.

You Will Lose Your Home

This is the main negative effect fo a foreclosure which is losing your home. This can be very painful for those that have a personal attachment, invested heavily, or have several dependants.

Credit Rating Fallout

This has mostly to do with what is known as a ripple effect. When your home gets foreclosed it makes other lenders get a negative opinion of you hence you may find getting a car loan, rental application harder. Even your credit card company hiking the interest rates.

Taxes

You can have your debt partly or totally forgiven if your house has been foreclosed by your lender as they accept your house in exchange. However, in the eyes of the IRS, any debt you are forgiven is considered income and is taxable.

Job Searching Gets Harder

Jobs where checking your credit report is part of the process could consider you a security risk making it harder for you to pass the interview stage.