Foreclosure can be a financially devastating and emotionally draining event. Not only does a person lose his home, but he may also face serious financial repercussions. He may even have to deal with negative thoughts and emotions for months afterward.
The following information will discuss 3 negative effects that a foreclosure may cause, and what you can do to avoid those consequences.
Negative Effects of Foreclosure
- Damaged credit. If you suffer a foreclosure, your credit score may drop by over 250 points. Furthermore, it may take 3 years or longer for your score to start rising again. That means for several years you may not be able to take out a line of credit from a reputable financial institution – and if you want to buy another house, you’ll likely have to wait quite a while before a lender is willing to finance your mortgage.
- Financial costs. In some cases, you’ll actually have to pay taxes on the difference between the amount of money the bank recovers from the foreclosure and the full amount of your mortgage. The IRS may consider that difference to be taxable income, leaving you on the hook for a sizable tax bill.
- Mental distress. Losing a home is never an easy thing to endure. A foreclosure could result in the onset of many negative thoughts and feelings, such as increased anxiety, loss of self-respect, and depression.
What You Can Do
Perhaps the best option to avoid the negative consequences discussed above is to sell your home quickly. Of course, putting your house on the market takes time, and comes with upfront costs. For that reason, many homeowners facing foreclosure have decided to sell to an investor for cash. It’s a quick and easy process, and will provide you with the resources to start fresh.
If you’d like to learn more about this option, reach out to Fidelis Properties today. We will buy your house for cash, and help you to get back on your feet – guaranteed!