Taking the first steps to get a mortgage on a home would have been an exciting process. During this time, you’ll likely have been feeling optimistic regarding what the future held for you and your family. However, a mortgage is a huge responsibility, since you’ll need to make monthly repayments. If you unexpectedly lose your job or start struggling financially, this can feel difficult or impossible.
When you are unable to continue paying your mortgage for a significant amount of time, your creditor will likely start foreclosure proceedings. The following is an overview of the most common reasons why a foreclosure is brought about.
Going through a divorce can put a financial strain on both spouses due to the financial impact of litigation, as well as creating an increase of living costs for each spouse since they will no longer be living in the same home and sharing incomes. If only one person is now responsible for the payment of the mortgage, this can cause them to get behind on payments.
A sudden job loss is a huge driver of foreclosure for obvious reasons. When the country is going through a recession or other sudden financial issues, job losses can happen at mass and cause many people to lose their homes due to foreclosure.
Failed real estate developments
If you got a mortgage on a real estate development that was not yet completed, you essentially paid for something with credit that did not yet exist. If this real estate failed, you may now have a significant mortgage on an undeveloped tract of land, meaning that you will need to be renting other accommodations while keeping up with a mortgage that costs much more than the land is worth. Many people decide that going through foreclosure is the best way to deal with this.
If you are struggling to pay your mortgage, you should look at your options for foreclosure, irrespective of the situation. You may choose to engage in foreclosure defense or may realize that pursuing foreclosure is the option that makes the most sense.