Considering Foreclosure in Branson? Consider This First

Many home owners are in a difficult position these days. Of course, we are all aware of that. The number of foreclosures has increased dramatically over the last few years in this area and is a major part of our real estate market today. As the rate of foreclosures has risen, the value of homes in our community has fallen. Today, foreclosures in Branson make up about 30% of all real estate sales, and our homes are worth about 15-20% less than what they were just a few years ago.

No doubt, this is bad news, and it’s affecting our thoughts about home ownership. I’ve talked to many home owners over the last few months who are considering just “giving their home back to the bank”. Foreclosure may be the only solution for some, but not everyone. There are serious consequences to you, personally, and to our local housing market if you default on your mortgage without good cause.

For some home owners, a foreclosure is just necessary. Some home loans have increasing interest rates that make the payment unaffordable for the home owner. Others have been unemployed for an extended period of time, or for some other reason, they no longer have enough income to make their payment. In these circumstances, a foreclosure may be unavoidable, but there are many home owners that would be better off just staying put.

I have seen an unfortunate number of home owners who could have avoided foreclosure, but stopped making payments on their home simply because the home is worth less than what it was a few years ago. I don’t believe that being “under water” on your mortgage is reason enough to give up on making your payments, and I think it’s important for home owners to consider the consequences before they take that step.

Consequences of Foreclosure:

Following foreclosure, the consumer’s difficulty is far from over. The damage to your credit alone will likely cause interest rates on credit cards to jump to the default interest rate, which can be as high as 30%. Any car purchase for the next few years will likely require a much higher than normal interest rate, and a home purchase will be out of the question for several years. Of course, you still have to have a place to live, so expect to pay first month’s rent plus a security deposit in order to lease a home.

Alternatives to foreclosure:

Stay put. If you can afford your mortgage payment – even if you have to cut back in other areas of your budget – it’s best to keep on making your payment. If your house is worth less than what you paid for it, be patient. History has shown us that home prices bounce back. If your payment is too high, try negotiating with your lender to work out new terms. Many home owners are finding relief through loan modifications – reducing their interest rates to more affordable levels. Contact your mortgage holder for more information.

With the rapidly increasing home values of the early 2000s, everyone suddenly became a real estate investor. Yes, real estate is a great place to invest, but for most of us, remember that the primary reason for owning a house should be that it’s your home. Avoid foreclosure if at all possible – the long term effects are too great. If you can continue making your payments, do so. The more of us that do, the quicker we’ll see a recovery.

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God cares about honesty in the workplace; your business is his business. Proverbs 16:11 (MSG)