The wheels that drive foreclosures turn very slowly, and there is ample opportunity to steer the ship in a new direction and salvage your future. Sadly, foreclosure is entirely avoidable, yet lives are often damaged for years because homeowners didn’t understand the consequences and took no action to prevent the process.
Whatever circumstances change to create the situation, homeowners who take steps to bypass the inevitable loss of the home will have the most control over their future. As the letters from the lender begin to arrive, there is still time to reach out to the lender and attempt to work towards an amicable solution.
The road ahead will be difficult for those who choose to keep their heads in the sand and wait for the lender to foreclose. Read on as we discuss five ways the foreclosure of your Fort Myers house will impact you in the future
Costly
The financial repercussions of foreclosure on your Fort Myers house extend far beyond the initial loss of your property. Attorney fees associated with navigating the foreclosure process can reach into the thousands, adding a significant financial burden during an already stressful time. But the expenses don’t stop there. Unpaid mortgage loans often accrue substantial late fees, and the foreclosure process itself can generate additional costs. These financial burdens impact not just you, the homeowner. Lenders who lose money on foreclosed properties see their bottom lines shrink. Local governments may face lost tax revenue from the devalued property, and surrounding property values can decline due to the presence of a vacant or poorly maintained foreclosed home. In essence, foreclosure creates a financial ripple effect that can negatively impact a wide range of stakeholders.
Lose Equity
Foreclosure on your house in Fort Myers can significantly erode the equity you’ve built up over time, impacting your financial situation well into the future. Equity represents the difference between what you owe on your mortgage and the current market value of your home. It’s essentially the portion of the house you truly own. Foreclosure throws several wrenches into this equation. First, the process itself comes with a stack of fees and costs – attorney fees, title fees, even forced-placed insurance if your own homeowner’s policy has lapsed. These fees eat directly into your equity, shrinking the pool of money you’d get back from the sale.
Secondly, lenders in foreclosure situations often rely on the lowest possible appraisal value for the property. This means your house, which may have appreciated in value over the years you’ve owned it, could be valued for significantly less during a rushed foreclosure sale. This low valuation further depletes your equity and reduces the potential payout you might receive. In the worst-case scenario, if the sale price of the house doesn’t cover the entire mortgage balance with all the additional fees factored in, you could end up with negative equity – owing money on a house you no longer own. This can have a devastating impact on your credit score and limit your ability to secure loans for future endeavors like buying another house or starting a business.
Future Credit
One of the most immediate impacts of the foreclosure of your Fort Myers house is the effect on your credit. While it won’t last forever, your foreclosure will be on your credit report for seven years. While not impossible to acquire credit with this red mark on your records, rest assured you will pay much higher interest rates as a penalty, making life even more expensive as a consequence. It will help your creditworthiness as you work towards rebuilding your credit and regain control of your financial future.
Future Homeownership
Qualifying for a mortgage will be difficult. Under several government programs, it will be impossible for the next seven years; if you qualify for VA loans, the period may be as short as two years following the foreclosure of your Fort Myers house. There are, however, some extenuating circumstances, such as illness, divorce, or job loss, that will allow these lenders to work with you, so don’t put your head in the sand again; reach out and take charge of your future.
Future Employment
As more employers run credit checks in the attempt to find more productive workers, your future employment potential has become another one of the ways the foreclosure of your Fort Myers house will impact you. If you are in this situation, concentrating on credit repair will work in your favor. Although it doesn’t make every job impossible, your hirability is more dependent on your creditworthiness if the job requires you to handle money or customers’ financial data.
Core Real Estate Properties is here to help. Discuss the impending foreclosure of your Fort Myers house with the direct buyers at Core Real Estate Properties without any obligations. The experienced pros at Core Real Estate Properties want to help you end your foreclosure nightmare today. Call Core Real Estate Properties at 239-360-3176 or send us a message to learn more.