Buying a home is exciting, but it’s easy to get in over our heads and end up in debt. Here are some common reasons homes go into foreclosure.
Unexpected Job Loss
If a homeowner suddenly finds themselves unemployed, it can significantly impact their ability to pay for their home. While a mortgage forbearance can be a solution, it may lead to greater problems down the road.
Disasters
Flooding, hurricanes and house fires can suddenly wipe out a home without warning. Paying for the damages out of pocket is not affordable for most people. Proper insurance is key.
Higher Home Expenses
A person may initially buy a home they can afford, but over time expenses go up as the home’s value increases. Mortgage payments stay the same, but costs like property taxes, insurance, and HOA dues can increase significantly.
Bad Budgeting
In addition to a mortgage, the expense of home repairs and upkeep ranges from 1%-4% annually. Underestimating the actual cost of owning a house is a common mistake. Overspending, growing credit card debt, and not saving for emergencies can also lead to financial difficulties.
Divorce
When the incomes of two people are needed to keep up with the mortgage, a divorce can increase the chance of foreclosure. The credit and finances of both partners can be greatly impacted when mortgage payments are missed.
Medical Bills
Unexpected illness or injuries can eat up a homeowner’s finances. It’s even worse if they are unable to work and can’t pay the mortgage. A loan modification may help if the owner has enough home equity.
Death
If the main household income is lost due to a death, surviving family members can suffer financially. Death is a common cause of foreclosure.
There are ways to avoid foreclosure. The Law Office of Todd Cushner and Associates can help. We have a proven track record for successfully fighting foreclosure in the state courts and federal bankruptcy courts. Contact us today and let us help you find a solution.
