Foreclosure is an extremely challenging and stressful situation which leaves many homeowners uncertain about the future. This article explains the effects of foreclosure in Kansas City for homeowners.
Effects of Foreclosure in Kansas City
Losing the Property: Foreclosure is the formal, legal process of taking back possession of a property by a lender from a borrower. Since most people borrow money from the bank, a bank will foreclose on the homeowner for a lack of payment in most cases. Therefore the first effect is that the homeowner will lose their property.
Damaging Your Credit Score: A foreclosure will hurt the credit score of the borrower and will make it much harder to qualify for additional loans, particularly loans to buy more real estate. This will fall off of the credit record seven years after the first missed a payment. But this can be financially harmful during that period as well.
Emotionally Stressful: Going through a foreclosure is extremely stressful and can severely damage a person’s mental wellbeing. The uncertainty of the process, where you’re going to live, how will this affect my finances and so on can be a very challenging situation to deal with, resulting in emotional distress.
Decreased Property Values: When many foreclosures happen in a small area, the property values start to become depressed in that area. There are always a certain percentage of foreclosures in any market. But when they begin to be concentrated in a certain area, property values can start to decline which reduces the available options for those going through the foreclosure process currently, or facing that possibility.
How to Prevent of Reduce Some of These Effects
Talk to Your Bank: Many banks have programs in place to help people get through a difficult financial period without having to foreclose upon them. Unfortunately, many people neglect to communicate with their bank until it is too late. If you are getting behind on payments, or have already begun the foreclosure be sure to take time to speak with your lender. Many times they will be able to delay or stop the foreclosure process, and work out a plan to get you back on track.
Sell the House: The foreclosure process does take a bit of time. So if it is early in the process, consider selling your home. You may be able to delay the foreclosure by letting the bank know that you are selling the property. Then you could have enough time to sell the house on the open market.
Sell the Home to a Cash Buyer such as Green Sparrow Properties: We specialize in purchasing homes quickly and for cash. This means that you will often be able to sell the property before the bank can complete the foreclosure process. In that case, you will avoid having a foreclosure on your record. This can provide great relief, cash in your pocket, and preserve your credit to allow yourself to have greater financial options.