Questions You Need To Ask Yourself Before You Foreclose.

April 27th, 2009 | by admin |

For many Americans the answer to that questions is “I have no choice, I have to go through with foreclosure.” But for a lot of other people, the it is a lot harder to answer.  You may just barely be able to pay your loan, but you are not able to sell your house because you have lost equity and can not sell it.  You may ask yourself is it really worth it to stay in a home that will never catch up to the mortgage amount owed?

Here Are Some Costs of Walking Away From Your Mortgage.

It may leave you feeling bitter about yourself for not staying and paying as you agreed.You may have a certain attitude about this, or you may not. You have to decide.

Say Goodbye To Your FICO Score

Your credit and FICO Scores with suffer severe damage from a foreclosure. The scores on your report can fall dramatically.You will not be able to remove the bad mark for at least seven to ten years.

Your credit report is also referenced by potential employers too, so it can have an impact on your future employment possibilities.  However, because foreclosure is so rampant right now, employers may not look at is as badly as they once did.  So it may not be as bad as before.

You May Owe Extra Taxes.

Usually the IRS will hit you with a tax bill for any amount forgiven by the bank.New government policies may allow you to catch a break here though.You should definitely consult the advice of an accountant and an attorney regarding these issues.

Also in some states, banks may be able to come after you for the money you owe them. They do not usually do this, but it may become more commonplace as the financial crisis deepens.

So Where Do You Live After You Give Up Your Home?

Now that your home is gone, you will have to search for an apartment somewhere.In many cases, renting is no bargain over owning. As the demand for rental units climbs, so does the amount charged. Paying the rent could be as hard as paying the mortgage.

So therefore, the answer is there is no easy answer. Walking away from your home may have benefits for you, but it also comes with a steep price.