Foreclosure Consequences—6 Things that Will Happen After Foreclosure

Since foreclosure has reached a record-breaking rate, we may wonder what happened to those families that have lost their homes. It is a fact that foreclosing a property is just the beginning, after the final foreclosure is declared, the emotional and financial battle is far from over. Once a person loses his home or property, there is a huge amount of pain involved even if eventually that person will again become a homeowner. Still that possibility won’t happen anytime soon, let us take a look at some foreclosure consequences families deal with and the solutions to these issues.

1. A new place to call home

Foreclosure Consequences and Finding a New Home

Since it is very obvious, the immediate of all foreclosure consequences is looking for a new place to stay, especially if you have kids. Rentals are usually the best option, but lack of cash is holding some families to do so. Although there are some landlords who are willing to accept credit scores as low as 580, others are reluctant, since a foreclosure indicates that the potential tenant hasn’t paid his housing bills. However, if the candidate can explain the foreclosure and has a solid job to back him up, then he may be accepted. Scraping for rental deposits isn’t quite that easy, that is why it is very wise to make plans as soon as foreclosure comes into the picture.

2. Heavily affected by credit charges

Once homeowner default on mortgages, credit card also will come closing in on you, they have a “default rate” which will skyrocket your interest rate up to 30%. You’ll also have a hard time getting a car loan since a foreclosure is rarely the only credit slip-up you can make. Often times, former homeowners will have a difficult time climbing up the ladder again to have a good credit score.

3. Starting over

The length of time it takes from the completion of a foreclosure sale until the borrower can get or start a new mortgage is four to five years. But when a foreclosed owner can explain the extenuating circumstances on why he was foreclosed like job loss perhaps, the foreclosed must only wait for three years. The best option is to obtain a mortgage after foreclosure with the federally insured FHA loan, this will take at least three years to be approved and that the borrower must show that they have been practicing good bill-paying habits since the foreclosure.

4. Laying your cards down

Should you apply for another job because you have lost your previous one, you must be ready to give an explanation to your potential boss why you were foreclosed. As for employers, it is highly recommended that a credit check is done before hiring especially when it will be dealing with money, like cashier or accountant position.

5. Getting slammed with the tax bill

How frustrating it feels when you just lost your home due to foreclosure then you get a mail saying that you need to pay a certain amount of money for the taxes on the mortgage that the lender was not able to recover from the sale of the property. Good thing Congress passed a bill that takes care of these kinds of problem with some exceptions, of course.

6. A silver lining

The emotional heartache of leaving your home and neighborhood are impossible to comprehend, especially the children, they are the ones that suffer the most. But there is always a silver lining after a storm. The only hope is that due to the number of foreclosure these days, the stigma of the pain will be lessened. Just remember that you are not alone, there are thousands out there that are also going through the same foreclosure consequences and there are ways to get through this.

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