Sometimes, people have no choice but to foreclose their Kansas City home loan due to a financial hardship. These hardships range from permanent disabilities to losing a spouse or job. Foreclosure can result in both short term and long term consequences, making it a problem you want to avoid if at all possible. The main two consequences of home loan foreclosure include:
The International Revenue Service, or IRS, considers unpaid debt as taxable income. This term includes a foreclosed Kansas City home loan. It may seem unfair to tax an amount of money you never had in the first place. However, you essentially have money you wouldn’t have had if you were still responsible for the loan.
Regardless of how good your credit score was before your foreclosed Kansas City home loan, your credit score will suffer from foreclosure. In fact, people with good credit will lose more points than a foreclosing person with bad credit.
A short sale is when your lender allows you to sell your home for less than the amount of your loan and forgive you the difference. By achieving a “paid satisfactorily” short sale, you can keep your credit score from falling as a result of foreclosure. However, if your short sale results in a “settled for less than the full amount due,” you may still suffer some credit score consequences.
Foreclosing is not beneficial to anyone. Therefore, mortgage lenders typically have programs in place to prevent foreclosure when possible, including changing your mortgage rate with:
Putting a home into a trust may seem like an option reserved for older homeowners who have paid off their mortgage and have accumulated an estate, including assets such as a home, motor vehicles, various investments, boats, rental properties, furniture and even a vacation home. However, having a home that’s owned outright is not necessary […]
The start of a new year is often seen as the time to make major changes in life. While many people resolve to start hitting the gym, losing weight, reading more, or making a career change, others may decide to buy a new home in the coming months. That’s a great goal, one that can […]
Buying a home is one of the most exciting events in a person’s life. A new home can mean a new direction, a major step forward, the beginning of a family or just a fun opportunity to live in a new state, city or neighborhood. It’s also a complex task that involves several important steps. […]
