Many homes throughout the United States are experiencing huge dips in value. Few places have escaped the decline. Some homeowners are able to hang on and keep up their payments. But not everyone can do it. The bottom line is that there has been no decrease in the number of homeowners dealing with foreclosure in the past year.
If you are someone who has lived in and made payments on a home for a number of years, you have probably built up some equity. And so in that case you will no doubt do whatever it takes to keep up with those payments. Despite the fact that your home has decreased in value you have enough invested that you're hoping that the housing market will rebound at some point in the near future.
Then there are those who purchased a home in more recent years with practically no money down and with very low interest rates for the first few years. But now the low interest is over and mortgage payments are huge. If you are in this situation, foreclosure may be almost a foregone conclusion.
But how about those who have jobs and so can afford to continue making their payments? A recent trend among some of these homeowners is to stop making their payments. Instead they are choosing to walk away and let their homes go into foreclosure.
Despite making more than enough to make their payments, these homeowners realize that they're not getting ahead, no matter what amount of money they earmark to paying down their mortgages. Their homes are losing their value so quickly, that it's just not worth it financially to continue to pay.
Everything is very different when you are dealing with foreclosure that you decide to allow to happen. So before you let it happen, you need to seriously think about the long range consequences of your actions. The same rules won't apply to you. What can you expect if you allow this kind of foreclosure to happen?
Well, for one thing, government officials have stated that the "forgiveness" clause that may be applied to those who legitimately lose their home to foreclosure will not be applicable to people who choose a foreclosure even when they can afford payments. The steps, if any, have not yet been revealed to try to stop these walk away by choice foreclosures.
There is little doubt that your credit rating will be affected negatively. It's even possible that the penalties could last longer or be more severe. Banks are especially concerned because of the fact that if you've chosen to walk away from financial obligations once, what's to stop you from doing it again at some point in the future.
If you have a notation on your credit report you may have more difficulty getting financing for other purchases. If you are even able to get financing, it's possible that you'll pay much higher interest rates. You might not be able to even get a credit card for a long while.
Will banks and mortgage companies be willing to finance mortgages for those who choose to default? And will this choice have a negative impact for years in the future?
No one knows exactly what's going to happen. But before you walk away, seriously consider what dealing with foreclosure in this way could mean for you, now and in the future.
If you are someone who has lived in and made payments on a home for a number of years, you have probably built up some equity. And so in that case you will no doubt do whatever it takes to keep up with those payments. Despite the fact that your home has decreased in value you have enough invested that you're hoping that the housing market will rebound at some point in the near future.
Then there are those who purchased a home in more recent years with practically no money down and with very low interest rates for the first few years. But now the low interest is over and mortgage payments are huge. If you are in this situation, foreclosure may be almost a foregone conclusion.
But how about those who have jobs and so can afford to continue making their payments? A recent trend among some of these homeowners is to stop making their payments. Instead they are choosing to walk away and let their homes go into foreclosure.
Despite making more than enough to make their payments, these homeowners realize that they're not getting ahead, no matter what amount of money they earmark to paying down their mortgages. Their homes are losing their value so quickly, that it's just not worth it financially to continue to pay.
Everything is very different when you are dealing with foreclosure that you decide to allow to happen. So before you let it happen, you need to seriously think about the long range consequences of your actions. The same rules won't apply to you. What can you expect if you allow this kind of foreclosure to happen?
Well, for one thing, government officials have stated that the "forgiveness" clause that may be applied to those who legitimately lose their home to foreclosure will not be applicable to people who choose a foreclosure even when they can afford payments. The steps, if any, have not yet been revealed to try to stop these walk away by choice foreclosures.
There is little doubt that your credit rating will be affected negatively. It's even possible that the penalties could last longer or be more severe. Banks are especially concerned because of the fact that if you've chosen to walk away from financial obligations once, what's to stop you from doing it again at some point in the future.
If you have a notation on your credit report you may have more difficulty getting financing for other purchases. If you are even able to get financing, it's possible that you'll pay much higher interest rates. You might not be able to even get a credit card for a long while.
Will banks and mortgage companies be willing to finance mortgages for those who choose to default? And will this choice have a negative impact for years in the future?
No one knows exactly what's going to happen. But before you walk away, seriously consider what dealing with foreclosure in this way could mean for you, now and in the future.
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