Some homeowners (as well as several lending institutions) are still stinging from last decade’s Financial Crisis that drove the United States economy into a ditch. The Financial Crisis deeply affected the real estate market, too – home sales were down to their lowest in years as young people graduated college left and right without finding work that paid enough to save for a home. Throughout this, homeowners, too, were finding themselves out of work, and having a difficult time making ends meet, including meeting their mortgage obligations. In 2010, the impact of the Financial Crisis hit its peak in the real estate market with over 2,000,000 reported foreclosures on homes alone. This affected businesses, schools, and other local organizations.
Hard as Las Vegas was hit by the Financial Crisis, the city has bounced back, and has been a fast-growing city for years. But even with the glitz and glamour of the Strip and the fun family options, Las Vegas residents may still find themselves in a difficult financial situation where they home could be compromised. Foreclosure happens when you fall so far behind in your mortgage payments that the bank takes ownership of the home to settle the debt. Foreclosure is a long and tedious process, for both the homeowner, and for the bank. Avoiding foreclosure should be the goal of any property owner, and there are so many reasons why.
Why You Should Avoid Foreclosure
The biggest, yet most-overlooked reason to avoid foreclosure in Las Vegas is the emotional toll that it can take on you. Even if you don’t love your home, the time that you spent there has some fond memories, and you may have had plans to do some upgrades, and sell your home at a price higher than the one for which you bought it. If you’d planned to live in your home forever, foreclosure can be devastating. The emotional hardships, though, are eclipsed by the immense financial consequences that come with foreclosure in Las Vegas, or in any city. Foreclosure leaves a monstrous mark on your credit that can affect other purchases that you might want to make in the future. This could include home purchases, car purchases, or even opening a new line of credit. Even worse, if you’re able to make larger purchases, you may find that your interest rates are much higher, or that higher percentage down payments are asked of you. Having good credit is essential to having easier access to the things that you need to live in Las Vegas. What’s more, foreclosure isn’t just a tedious process for the homeowner – it’s tedious and complicated for the lending institution, as well.
When a bank repossesses a home, the bank takes full responsibility for the home. This means managing the home’s care, something for which the bank must hire a Las Vegas real estate agent. The bank must also hire a home inspector, and possibly an appraiser. After all of the time and money the bank must spend when they take possession of the home, the home must receive any necessary repairs, and possibly upgrade the property. Once all of the repairs and necessary upgrades are finished, the home will enter the market, usually marketed as the foreclosed property that it is. The Las Vegas real estate agent responsible for selling the home may spend weeks marketing and networking the home to potential buyers, and your lending institution will have to see that all of this is done.
How to Avoid Foreclosure in Las Vegas
Avoiding foreclosure in Las Vegas starts with ensuring that you are up to date with all of your mortgage payments. Falling behind on your mortgage happens to the best of us with the best intentions, so don’t think that you will face foreclosure by missing a single payment. Be advised, though, that your lending institution may choose to report anything that they feel is a red flag to the credit bureaus, including missed mortgage payments.
The next important step to avoid foreclosure in Las Vegas is to seek counseling. You have the option to contact a real estate attorney, who may then refer you to a real estate attorney who specializes in foreclosures. If you can’t, or don’t want to talk to a real estate attorney, the Making Homes Affordable Program may be able to help. This federally-funded program is designed to assist people who are facing financial hardships that may cost them their home.
Another good way to help yourself if you fall behind in your mortgage payments is to communicate with your lender. Perhaps this is counterintuitive to some, but for the reasons explained above, your lending institution will have options for you, including refinancing your home for a lower interest rate. It is also possible that your home’s mortgage may roll over to another bank. It happens, occasionally, that another lending institution will buy your home’s mortgage from your lender. When this happens, the new lender is required to notify you within 30 days of the transaction. Your new lender may also have other options for you that can help you navigate or resolve your debt to the bank, including all of the associated fees.
Refinancing your home is an option offered by most lending institutions that can help you whether you have a fixed or adjustable rate mortgage. This is part of the reason that communicating with your financial institution is so important: you will save both yourself and your lender a heap of trouble if you let them know that you are forthcoming with them.
If Foreclosure Happens to You
You should know that foreclosure isn’t the end of the world. It is certainly difficult to manage, but you will have opportunities to save yourself. First, open yourself to the possibility of selling your home before foreclosure. When you do that, the payments for your home then become the responsibility of the new owner. Hiring a Las Vegas real estate agent to help you in this process is essential, as the process can be long and involve quite a bit of paperwork. Having someone to guide you through foreclosure is invaluable, but preventing foreclosure is always possible.