By Nick Adama
Some homeowners, when facing the threat of a potential financial hardship, decide that their current house is just too expensive and will most likely become a target of foreclosure. The homeowners may not be behind yet, but they know there will be a loss of income or their mortgage payment will reset to a higher payment that they can not afford. So, there is often a tendency to purchase a new, smaller home before the crisis occurs and allow the old home to be taken away by foreclosure. In some cases, this is not such a bad idea.
However, this is a decision that needs to be carefully considered and its outcome will depend on how quickly the homeowners can close on buying the new home. If they are already missing mortgage payments, then it will be difficult, if not impossible, to qualify for a new home loan. But if their credit still allows them to qualify for a mortgage, then they may want to attempt to get the new house as soon as possible and begin making a transition to a more affordable lifestyle.
Once homeowners start missing payments on the old house, the foreclosure process will start (especially if they planning on letting it go into foreclosure and are doing nothing to gain foreclosure advice or seek out options to save their home). The bank will sell the house at a sheriff sale, and the new owners will be able to evict the foreclosure victims and anything that is left in the old house. Purchasing a new house after this process has begun will be impossible due to the foreclosure status of the old house and the negative effect on one’s credit after several mortgage payments go unpaid.
Foreclosure victims should also be concerned about the danger of the Continue Reading…
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