How Does Foreclosure Impact Me?

All across the United States, Americans are facing the loss of their home to foreclosure every day. Those living in Utah are not exempt. Banks are taking hard-working individual’s homes, leaving them nothing to show.

However, the fear and anxiety of foreclosure do not need to wreck you, even if you are behind on your mortgage payments. Thankfully, there are other options available. 

To learn more about the impact that foreclosure can have on you and how to avoid it, continue reading below.

No doubt, losing your home to foreclosure leaves you with long and short-term consequences, including serious effects you may not have considered. Here are some of the effects foreclosure can bring that you may face:

Financial Consequences — A foreclosure of home seriously impacts your credit. A credit score can drop 250 points or more. A severe drop like that in your credit score will make opening a new line of credit very tricky. Credit takes a long time to recover and requires a lot of patience and leaves zero room for financial slip-ups. You can expect improvement to take a few years. If you are interested in buying another house, you can expect twice that amount of time to pass before you qualify for a mortgage.

When a bank forecloses a house, they are unable to recover the amount that was borrowed. That difference is considered income and is taxable. If this happens to you, you may be required to pay income tax on the part you were unable to repay. If you find yourself in this situation, you may want to hire a CPA or a lawyer to find out specifics.

Mental Consequences — The psychological effects foreclosure can have on a person are very serious. The possibility of losing your home and being homeless is enough to cause severe stress, deep depression, and a lowered sense of self-confidence.

Some other options and solutions may stop the bank from moving forward with foreclosure if you are on the verge of losing your house. The fastest of which is to sell your home as soon as possible. Although, a traditional listing process can take a lot of time, and a foreclosure may not leave you with the necessary time. 

On top of that, selling a house in a traditional listing will require up-front costs like cleaning, repairs, and listing photographs. If you have missed mortgage payments, cash may be tight, making footing these other costs nearly impossible. Instead of a traditional listing, you can sell your home quickly to a professional home buyer.

But before you contact just any homebuyer, make sure you do your homework. Many homebuyers require you to pay commissions, agents, and fees. If you do not want to pay extra fees or commissions and want a quick, cash offer without the hassle of cleaning or making repairs, contact Utah Sell Now. Avoid the stresses foreclosure brings and contact us today.