Though we’re two years into the COVID pandemic, the year 2022 continues to be challenging for everyone, especially homeowners. In a declining and unstable economy, homeowners are more likely to lose their jobs and fall behind on their mortgage payments- resulting in foreclosure.
It is important to note, however, that foreclosure can negatively affect your credit score for many years to come. Read on to learn why you need to avoid foreclosure in Fort Worth, TX.
What Is Foreclosure?
Foreclosure is a legal process that enables lenders to recover the remaining loan balance from non-paying borrowers. An example of this would be a homeowner who fails to pay their mortgage and is foreclosed on by the bank. In an attempt to recover as much money as possible, the bank takes possession of the house and sells it.
The foreclosure process can be stressful, upsetting, and even frustrating, not to mention damaging to your credit score.
What is the Importance of Your Credit Score?
Financial life depends on credit scores. Credit scores determine your ability to obtain credit cards, loans, and even good cell phone plans. A good credit score shows your lender that you pay your bills on time and are well-versed in handling your finances. Essentially, a higher credit score will allow you to enjoy lower interest rates and increase your chances of receiving financial opportunities.
How Long Can a Foreclosure Affect Your Credit Score?
Building an excellent credit score can take a lifetime, but it only takes one mistake to destroy it. When you give up your home to foreclosure, your credit score can decrease by 200 to 300 points. Various ripple effects are associated with this drop, including difficulties obtaining car loans, credit cards, and even insurance.
A foreclosure might stay on your credit report for as long as seven years. Still, the impact will diminish over time by keeping credit balances low and making payments in a timely manner.
Avoid Foreclosure in Fort Worth, TX, With Favor Home Solutions
If your home is at risk of foreclosure, selling it can be the best course of action. At Favor Home Solutions, we realize how difficult this decision may be. We’re ready to assist you through the process so you can sell my house fast in Fort Worth, TX.
When you work with us we:
- Pay all the closing costs
- Take care of all the paperwork
- Close on the date of your choice
- Analyze your situation and make you a fair, all-cash offer
- And more!
If you’re interested in learning more about getting a free, no-obligation cash offer for your home to avoid foreclosure in Fort Worth, TX, contact us today!