Buying a home is one of the most exciting achievements in any person’s life. However, there are stresses associated with owning a home, especially the monthly mortgage payments. When the economy gets worse or a person loses their job, they find it difficult to continue paying the house loan, resulting in foreclosure. The effect of losing a home to foreclosure is that an individual is left homeless. Apart from being homeless, there are a lot of other consequences associated with losing a home due to foreclosure in Lawrence, KS as discussed below.
Difficulties in Finding a New Home
When an individual loses a home to foreclosure, any established assets in the premises are also lost. Getting another home loan becomes impossible for at least five years. Also affected is any relocation assistance as well as any leasing opportunities. This situation makes life difficult because it even affects the chances of getting a new job.
It Affects Credit Score
Defaulting on a mortgage lowers one’s credit score by hundreds of points and, to recover, it takes a couple of years. Every lending institution looks at an individual’s credit score before deciding whether to give them a loan. Again, if these institutions provide the loan to the person, they charge high rates of interest. It eventually becomes hard to get out of this financial situation, and the result is most probably depression.
Hefty Tax Bill
Another effect of foreclosure in Lawrence, KS is a massive tax bill. If the banks or the mortgage lending institutions fail to recover the whole amount it gave as a mortgage, the remainder is a taxable income to the homeowner. Any forgiven debt is a taxable income. In some cases, one may owe the bank the after sale balance if the entire initial loan amount is not recovered.
Since foreclosure affects a person’s financial future, it is advisable to prevent it at all costs. When you receive the foreclosure notice, contact some of the best professional attorneys, like Business Name, for legal assistance. They will help a borrower file for bankruptcy and assist in avoiding some repercussions like large tax payments.
