Today, more and more homeowners are faced with difficult decisions trying to determine if foreclosure is their only option left. Making a decision on whether to allow your home to go into foreclosure will impact you, your family and your credit for the rest of your life.
A lender can repossess a home in a process known as foreclosure if a homeowner stops making payments to the lender. For the lender the purpose of the foreclosure is to resell the home in order to recover the amount of money that is owed on the home. There are lasting implications for a homeowner who goes into foreclosure.
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Some of the effects of foreclosure include:
1) Significantly lower credit scores. Your credit score may be lowered by as much as 300 points or more. The result is a devastating mark on your credit report that will affect all of your future credit opportunities.
2) It is almost impossible to get your credit repaired after a foreclosure has been listed on your credit report and usually will remain a permanent mark on your credit report.
3) A previous foreclosure will greatly affect your mortgage rate for any future mortgage application that you may apply for.
4) A foreclosure can hinder your future employment opportunities as a result of the drop of your credit score, since most employers do a credit check. This is particularly true in many government positions, including law enforcement and military.
5) A foreclosure could put your current position in jeopardy should your current employer run a credit check on you.
6) The lender can seek a judgment against you in order to obtain the balance of the money that they didn’t receive during the sale of your property.
7) You might be also responsible for deficient monies following the foreclosure for an unknown amount of time, which would place you in a continued cycle of collections, depending on the laws in your state.
8) You and your family will have to relocate following a foreclosure. This always causes turmoil for careers, marriages, and children.
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