Foreclosure is like a double-edge sword and it cuts in two different ways – on one hand there is the emotional impact of losing your home through this process. On the other is the financial consequence of foreclosure, which will damage your credit for years to come.
Coastal Edge Homebuyers will be right here to hear your concerns. Better yet, we can give you some advice on how to save your credit and not even go into foreclosure. Yes, it’s possible. Call us at +1 (757) 414-7117.
When you start gaining knowledge about your particular situation and all the details around it, then we can start forming a strategy to help you avoid foreclosure. For now, let’s go over the effect of this difficult process on your life, credit and finances. We’ll cover 4 ways that a foreclosure will impact you in Chesapeake.
Here are 4 Ways a Foreclosure Will Impact You in Chesapeake
It’s no secret that the home values in Chesapeake have been rising over the years, after roughly 2010. What is equity? It’s the dollar amount of the difference between the worth of your home today minus the mortgage you owe. If you lose your home to foreclosure, you will lose all equity. That could mean a financial loss of tens, if not hundreds of thousands.
If you do end up in foreclosure in Chesapeake, it will badly damage your credit for 7 years. This will limit your ability to get credit for a house or any other major asset. So, you will often be denied credit. Even if you are able to get credit for something, you will have a low credit rating and you will be considered a high risk among creditors. This means that even when you do get credit, it’s likely that you will be paying an exaggerated amount of interest. Financial institutions will basically punish you with high interest rates, until you rebuild you credit again, which will take years…
When you go into foreclosure in Chesapeake, you may even get into extra debt. Here is why: even if the bank allows for the home to be sold at a loss/discount, you may still be liable for the difference between the sale price and what was owed as mortgage. This is known as “deficiency debt”. This will put an extra strain on your finances, because you don’t have that home anymore, but you still need to pay extra debt… and this is on top of the high cost associated with bad credit to begin with. So, please make sure you open all mail and keep all lines of communications open between you and the bank so you could come up with some type of a doable action plan so you never go into a foreclosure, if possible.
By now you should already know that foreclosure stays on your credit for 7 years. During that time it will be very hard to get a home loan. It will be very hard to qualify for renting an apartment. Even if you do end up getting lace to live, it may not be in a desirable neighborhood and the interest rate you will get on any loans will be sky high. You should avoid foreclosure at all costs. For example, Fannie Mae will require you wait 7 years before you could get new credit based on their guidelines.
Foreclosure in Chesapeakeis not only stressful to you emotionally, but it will have devastating effect on your finances and credit for years to come. Don’t wait to get help. Let us at Coastal Edge Homebuyers help reduce your burdens today. We may save your credit, and greatly reduce the pain for you! Send us a message or give us a call today at +1 (757) 414-7117.