5 Ways the Foreclosure of Your Home in Chattanooga, Tennessee Will Affect You in the Future

Foreclosure processes in Chattanooga and anywhere in the country move very slowly, which is positive for you as it gives you many opportunities to change the course of the process and try to reverse it. Foreclosure is completely preventable, but unfortunately, many times homeowners were not fully aware of the repercussions and did not act correctly to stop the foreclosure of their homes.

For this reason, it is important that you are informed about the actions or measures you can take to avoid the foreclosure of your home and ensure it does not affect your future, regardless of the circumstances that lead you to this situation. Even when the lender starts notifying you of your default, all is not lost; there is still time to try to negotiate a solution that benefits both parties.

This path will be very difficult for those who choose to ignore the situation and sit back waiting for the lender to foreclose. Not only because you will lose your home but also because it will bring several problems in the future. Let’s explore some of them:

Costs

Allowing your home to go into foreclosure is a costly procedure, not only for you as the homeowner but also for the lender, the local government, and even for the owners of nearby properties. Therefore, one of the worst ways the foreclosure of your home in Chattanooga, Tennessee will affect you is through the cost it brings, as your lawyer will charge you thousands of dollars, in addition to the fees that accumulate on the mortgage loan or in the foreclosure process itself.

Loss of Equity

The loss of equity is another way the foreclosure of your home will affect you in the future. Your equity in your home is the difference between the amount owed and the current market value of your property. So, as attorney fees and foreclosure costs accumulate, the equity you have built over the years will gradually decrease. Additionally, lending banks usually choose the lowest appraisal value, which further reduces your remaining equity.

Credit Impact

A foreclosure will remain on your credit report for seven years, so one of the most immediate effects of the foreclosure of your home in Chattanooga is on your credit. While this report won’t last forever, that negative record will make it difficult to obtain new credit in the future. And very likely, when you do obtain it, you will face much higher interest rates as a penalty.

Future Homeownership

After experiencing a foreclosure, obtaining a mortgage will be difficult; in fact, under some government programs, it will be impossible for the first seven years. If you qualify for VA loans, the period can be as short as two years after the foreclosure of your home. However, there are some exceptional circumstances like illness, divorce, or job loss that may allow banks or lenders to decide to work with you again.

Employment Prospects

Nowadays, more employers conduct credit checks to find more reliable workers, which means your future job prospects have become another way the foreclosure of your home could affect you. If you find yourself in this situation due to the auction of your property, it will be very important to focus on repairing your credit. While this situation won’t make all jobs unattainable, it will reduce your job opportunities, especially those involving handling money or clients’ financial information.

Foreclosures Available:

• Chattanooga: 120 homes available

By Elias DaSilva | September 26, 2024