Besides the obvious strain and emotional impact that comes with falling behind on your mortgage payments, losing your house to foreclosure can also devastate your finances. From the clothes you wear to the car you drive, or even where you reside or work, it will have a residual effect on your life for years to come.
The simple fact is if you can’t make your payments, you will lose your house. But the choices you make today will either set you on the path to fixing your finances, or make your bad situation worse. If you need help, Deschutes Home Buyers is here to listen to you and can address any questions you may have about your specific circumstances and what you can do to avoid these ramifications. Just call 503-383-1686.
By having a better understanding of what lies ahead, you will be better equipped for taking immediate action against the negative consequences of foreclosure from the start.
Your future self will thank you for taking the time to learn more about your options during the process. In this post I’ll cover 4 ways that a foreclosure will impact you in Ontario or anywhere in Eastern Oregon or Central Oregon.
Denied
Having a foreclosure in Central Oregon appear on your credit reports will cause you to be considered a credit bad risk. Once this appears in your credit history, it stays there for seven years and will impact your overall purchasing power during that period. Bad credit often leads to credit applications being denied for credit cards, loans or mortgages. Any financial institution that is willing to approve consumers with bad credit usually charges much higher interest rates and annual fees than those who have good credit. It could even be a reason you are passed over for employment opportunities.
Financial Loss
Among the top reasons for homeownership is the equity that builds up over time as your debt decreases, and Central Oregon property values rise. Your financial gains could be an amount in the hundreds of thousands. Equity is the difference between what your property would bring in the current market, and the amount that is still owed on the mortgage. Depending on what happens with your house after the bank takes it, a foreclosure can affect your equity either partially or in full, which could be a significant financial loss.
Debt
By taking quick steps to resolve a pending foreclosure, you can make the decisions on how your home is sold and for how much. Open your mail before it’s too late! Keep the lines of communication open so that you can be on top of what actions your lender may be ready to take and how much time you have to change the outcome in your favor. After a foreclosure you’ll have no such control. Should your Central Oregon property sell for less than is still due on your mortgage, you might still be required to make payments on this debt. This is known as a deficiency debt and can have an enormous impact on your lifestyle and family. Not to mention eating into your budget. Additional liability on your credit report will only increase the higher costs associated with having bad credit.
Future Housing
Foreclosure impacts your housing options in many ways. In general, landlords run credit checks as the first step when interviewing tenants. Naturally, your financial history will make you a higher risk and may cause you to be passed over for more desirable properties. Additionally, your choices in financing will be highly restricted when you’re ready to purchase another home. Fannie Mae is among the largest in the nation and offers a program with several financial benefits. Should you have gone through foreclosure and seek a mortgage lender, you should be aware that Fannie Mae will require a waiting period of 7 years before you will be eligible under their guidelines.
Facing the possibilities of a Central Oregon or Eastern Oregon foreclosure alone can be very stressful and inaction on your part risks your financial future. Don’t wait until foreclosure begins, let Deschutes Home Buyers help lessen your burdens today. Send us a message or give us a call today at 503-383-1686.