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FORECLOSURE FACTS
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What is foreclosure?
Foreclosure is the legal process by which your lender may repossess your home. When this happens, you must move out of your house. If your property is worth less than the total amount you owe on your mortgage loan, a deficiency judgment could be pursued. Both foreclosures and deficiency judgments could seriously affect your ability to qualify for credit in the future. So you should avoid foreclosure if possible.
Did you know that a foreclosure will remain on your credit for 7 to 10 years?
Ultimately, protecting your credit must be your number one goal. Your credit report will be with you for the rest of your life, and having a foreclosure noted on it will cause problems for many, many years down the road - problems that only time will erase. Take steps now to keep that from happening. It may be difficult in the short-term, but the long-term results far outweigh the alternative.
Did you know that in order to refinance you'll need a minimum of 25% equity?
Once you are more than 90 days late there are some lenders who may offer a refinancing plan. However, you will need a minimum of 25% equity.
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Filing Bankruptcy
Filing Bankruptcy will delay a foreclosure, not prevent it. All liens and mortgages against the property will remain and continue to earn interest and penalties, unless they're paid. If your purpose is to delay the foreclosure, perhaps because you have a large sum of money coming in soon, a bankruptcy may be a valid choice. Keep in mind that a Bankruptcy stays on your credit for 10 years, and you will have trouble getting credit and be charged high interest rates, high insurance rates, and may have trouble getting a job after a Bankruptcy. If foreclosure is the main issue, avoid a Bankruptcy. Bankruptcy will hurt you badly for a long time.
Bankruptcy should be your last resort!
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