Posted On 30 May 2020
These days more homeowners are facing a tough decision about whether a foreclosure is the only option they have left. Deciding to foreclose on your home will have implications on your family and your credit for the rest of your life.
When a homeowner can no longer make payments to a lender for a home, the lender may repossess a home in the process of foreclosure, usually with the purpose of reselling it, to recover the amount owed on the defaulted home. Homeowners facing foreclosure proceedings will face lasting implications.
A few of the effects of foreclosure are:
- Your credit scores will be significantly lowered, sometimes by more than 300 points. This is the single most devastating mark on your credit report and will affect all of your future credit possibilities.
- A foreclosure listed on a credit report is nearly impossible to have repaired and will most likely remain a permanent mark on this valuable personal report.
- Any future application for a mortgage you apply for will require you to reveal a previous foreclosure, greatly affecting your mortgage rates.
- Most employers will also conduct a credit check. With a huge drop in your credit score due to a foreclosure, this may also hinder your future employment opportunities. This is especially true of many government positions, including military and law enforcement agencies.
- If your current employer runs a credit check, then a foreclosure may even put your current position in jeopardy.
- In order to recuperate money they did not receive during a bank sale of the property, a lender may seek a deficiency judgment against you to obtain the balance.
- Depending on your state law, you may be responsible for deficiencies after the foreclosure for an undetermined time period, placing you in a prolonged cycle of continued collections.
- Your family will have to relocate. This is always a disturbance for children, marriages, careers, and other important aspects of your life.