Facing foreclosure undoubtedly brings challenges. Beyond the evident stress and emotional toll it places on your family and personal connections, foreclosure can severely affect your financial well-being. From your wardrobe to the car you drive, and even your future residence or workplace, the repercussions of a foreclosure will impact you for years.
317 Home Buyers is here to lend a listening ear and provide answers to any questions you might have regarding your unique situation and steps you can take to mitigate these consequences. Simply dial 317-623-4734.
Equipping yourself with a deeper understanding of how a foreclosure will impact you can empower you to take swift action against the adverse effects of foreclosure right from the beginning.
Future you will appreciate the effort you put into learning more about your alternatives during this process. In this article, we’ll explore four ways that foreclosure can impact you in Indianapolis.
4 Ways a Foreclosure Will Impact You in Indianapolis
Credit Denial
One way that a foreclosure will impact you is that when it surfaces on your credit reports, you’re going to be categorized as a risky candidate to the credit bureaus. This entry in your credit history will significantly diminish your ability to make purchases. Poor credit frequently results in rejection of credit card applications, loan requests, or mortgage approvals. Financial institutions willing to extend credit to individuals with poor credit often impose high interest rates and annual fees, which individuals with good credit can usually avoid. Furthermore, it might even influence potential job opportunities, potentially leading to being overlooked in employment considerations.
Loss of Equity
One of the key benefits of owning a home is the growth of equity over time, occurring as your debt decreases and property values in Indianapolis increase. The financial gains from this process can amount to hundreds of thousands of dollars. Equity represents the difference between the current market value of your property and the remaining mortgage balance. Unfortunately, under certain circumstances, a foreclosure can affect your equity, leading to either a partial or complete loss, resulting in a substantial financial setback.
Debt
Acting swiftly to address a looming foreclosure allows you to have a say in how your home is sold and the price it fetches. It’s crucial to stay updated by promptly reviewing your mail and maintaining open communication to understand the actions your lender may take and the timeframe available for you to influence the outcome positively. Once a foreclosure occurs, this control is lost. If your Indianapolis property sells for less than the remaining mortgage amount, you’ll still be obligated to pay the shortfall, known as a deficiency debt. This can significantly impact your lifestyle, family, and budget, not to mention the added strain on your credit report, escalating the costs associated with having poor credit. This is a relatively unknown way that a foreclosure will impact you, but it’s possibly one of the more financially devastating ones considering that you’re going to continue to maintain a sum of debt on a house you are no longer living in.
Future Housing
Experiencing foreclosure has a considerable impact on your future housing options. Typically, landlords initiate the tenant screening process by conducting credit checks. With a compromised financial history, you will be perceived as a higher risk, potentially causing landlords to overlook you for more desirable rental properties. Furthermore, if you plan to buy another home, your financing choices become severely limited. Fannie Mae, a prominent national entity, provides a program with various financial advantages. However, if you’ve faced foreclosure and intend to secure a mortgage through Fannie Mae, be aware that they impose a waiting period of 7 years before you become eligible under their guidelines.
Facing the possibilities of a Indianapolis foreclosure alone can be very stressful and inaction on your part risks your financial future. Don’t wait until foreclosure begins, let 317 Home Buyers help lessen your burdens today. Send us a message or give us a call today at 317-623-4734.