Foreclosures have long-lasting effects on the affected home owner and their families. The foreclosure process itself can last more than a year, but the consequences extend past finalization of the foreclosure.
Below are some of the most common consequences of foreclosure and how to best prepare for them.
Moving to a new home
Once the property has foreclosed, the occupants will be forced to leave their home. If the occupants decide to rent, they will most likely need to have a security deposit available. The good news is that if the foreclosed homeowner hired a foreclosure attorney to lengthen the case, they should have had adequate time to save money and prepare themselves financially.
There are also the emotional aspects involved with relocation. If children are involved, they may need to change schools and make new friends. Adults may find it hard to let go of the memories they created in their home. It is reasonable to feel distraught when a home is lost due to foreclosure.
Buying a new home
After some time has passed and the foreclosed homeowner is back on their feet, it is likely that they will want to buy a new home. It is definitely possible, but the borrower’s credit history will be scrutinized in great detail. Until recently, the potential borrower had to wait a minimum of three years after a foreclosure to be approved for another home loan. However, the FHA just approved their Back to Work program, which allows foreclosed homeowners to be approved for a mortgage 12 months after the foreclosure is finalized.
Lowered credit rating
Having a foreclosure posted in the credit history will have a negative impact on credit score. When creditors see any kind of default listed, it signals that an individual might not be credit worthy. This does not mean that they will never be offered credit in the future, but they will probably have higher interest rates. With time and good payment history, it is possible to recover.
Getting a new job
Poor credit history will not affect every type of job, but it might be brought up by a potential employer if the job requires any management of money. The best scenario is to stay current with all other recurring bills and credit cards. If the employer can see, through the credit history, that this person has attempted to keep all other debts in good standing, the employer will likely understand the explanation of the situation.
Going through a foreclosure is difficult for anyone that is faced with it. It may help to keep in mind that many individuals have been affected by foreclosures in the past few years and that judgment is not passed on anyone who is in that situation. With time and effort, most of the effects of a foreclosure will become history.
If you are worried about a possible foreclosure and you have been unable to pay your mortgage don’t wait any longer to contact our office. Our goal is to avoid having your home foreclosed on, our foreclosure attorneys will meet with you to discuss your personal situation and will guide you toward the best possible scenario. There are options!