The wheels that drive foreclosures turn very slowly, and there is ample opportunity to steer the ship in a new direction and salvage your future. Sadly, foreclosure is entirely avoidable, yet lives are often damaged for years because homeowners weren’t fully informed of the consequences and took no action to prevent the process.
Whatever circumstances change to create the situation, homeowners who take steps to bypass the inevitable loss of the home will have the most control over their future. As the letters from the lender begin to arrive, there is still time to reach out to the lender and attempt to work towards an amicable solution.
The road ahead will be difficult for those who choose to keep their heads in the sand and wait for the lender to foreclose. Read on as we discuss five ways the foreclosure of your Baltimore, MD house will impact you in the future.
Costly
One of the ways the foreclosure of your Baltimore, MD house will impact you is the significant financial burden it creates, both in immediate and long-term expenses. If you hire an attorney, you can expect to pay thousands of dollars in legal fees, and on top of that, additional costs will accumulate from the mortgage loan itself, including late fees and penalties. The foreclosure process itself also incurs substantial costs, such as court fees, administrative expenses, and potentially even property maintenance charges if the house is left vacant. These expenses can quickly add up, creating a heavy financial toll on you as the homeowner. However, the financial impact extends beyond just you—it is also costly to the lender, as they may need to pursue lengthy legal actions to reclaim the property, and to local governments, which incur costs related to the legal proceedings and any unpaid property taxes. Furthermore, local property owners may see property values decline due to the vacant, distressed property, which can negatively affect the community as a whole. Allowing your home to go into foreclosure, therefore, creates a ripple effect that impacts not just your personal finances, but the broader economic health of your neighborhood and beyond.
Lose Equity
Another way the foreclosure of your Baltimore, MD house will impact you in the future is through the significant loss of equity. As homeowners make regular payments on their mortgage, they build equity—the difference between the remaining loan balance and the current market value of the property. However, during the foreclosure process, this equity begins to erode rapidly. The mounting costs of foreclosure, including legal fees, late payment penalties, and other associated charges, eat away at the value you’ve built up over the years. Additionally, lenders often order appraisals that may reflect a lower value for the property, especially in distressed or foreclosed conditions. This means that not only are you losing the equity you’ve accumulated, but the sale of the home may result in a much lower return than expected. In many cases, the property could be sold at auction for less than its market value, further depleting any remaining equity, leaving you with little to no financial benefit from your investment in the property.
Future Credit
One of the most immediate and long-lasting impacts of the foreclosure of your Baltimore, MD house is the severe toll it takes on your credit. A foreclosure can stay on your credit report for up to seven years, casting a shadow over your financial profile. Although it’s not impossible to acquire new credit after a foreclosure, the road to recovery can be challenging. Lenders will view you as a higher-risk borrower, which typically results in much higher interest rates on any loans or credit you do manage to secure, making everyday expenses more expensive. Even simple tasks like applying for a car loan or a credit card can become more difficult and costly, as you’ll likely face less favorable terms. However, while the impact is significant, it’s not permanent. Over time, with careful financial management and a commitment to rebuilding, your credit can improve. Making timely payments, reducing outstanding debt, and monitoring your credit regularly will help restore your creditworthiness, allowing you to regain control of your financial future and eventually qualify for better lending opportunities.
Future Homeownership
Qualifying for a mortgage will be difficult. Under several government programs, it will be impossible for the next seven years; if you qualify for VA loans, the period may be as short as two years following the foreclosure of your Baltimore, MD house. There are, however, some extenuating circumstances, such as illness, divorce, or job loss, that will allow these lenders to work with you, so don’t put your head in the sand again; reach out and take charge of your future.
Future Employment
As more employers run credit checks in the attempt to find more productive workers, your future employment potential has become another one of the ways the foreclosure of your Baltimore, MD house will impact you. If you are in this situation, concentrating on credit repair will work in your favor. Although it doesn’t make every job impossible, your hirability is more dependent on your creditworthiness if the job requires you to handle money or customers’ financial data.
Perry Hall Investment Group is here to help. Discuss the impending foreclosure of your Baltimore, MD house with the direct buyers at Perry Hall Investment Group without any obligations. The experienced pros at Perry Hall Investment Group want to help you end your foreclosure nightmare today. Call Perry Hall Investment Group at (410) 989-5200 or send us a message to learn more.