If you are starting to default your mortgages, it can lead to foreclosure which in turns provide a negative mark on your credit score. Foreclosure is something that any property owner hopes to stay away from because its negative effects can last for years. Property owner who have faced foreclosure endure from incapacity to have a loan or difficulty in borrowing from months to years.
Foreclosure is very expensive both for the bank and property owner. Property owner faces expenses such as the cost of moving to another location or property, deposits to rental property, and hiring helps for the move. Aside from the negative effect on credit score, property owner faces the risk of deficiency judgment. As soon the bank reclaims your property, it will attempt to sell the property at an auction for the amount you owe. If no one buys your property in an auction, the bank will try to sell it via traditional way of selling. As we know, traditional selling process can take months with no guarantee of success. Your bank may not wait for such time and will sell your property well below its fair market value in the hope if selling it quickly. Selling your property below its market value may result to a successful sale but if the amount is not enough to cover what you still owe, the bank may and can sue your for deficiency.
Foreclosure’s negative effect will stay on your record and it will lessen over time. You can start rebuilding your credit rating by applying for small loans or credit cards and making the payments on time. Keeping your credit card balances will also help restore your credit rating.
To avoid the negative effects of foreclosure, you can sell your property before it happens. And the key is to sell it quickly. Although you will still lose the property you will earn cash from it and you certainly can use the money for your transfer. Sell your property to private investors like Lucas Properties and get cash immediately.