Foreclosed homes are a huge difficulty for many. No one wants to foreclose on their home, but foreclosed homes are a common occurrence. While some can take advantage of foreclosed homes, it is important to remember where they come from. Here are 5 main causes for homes foreclosing in no order.
- Unemployment: Losing one’s job quickly becomes a massive financial burden when income is reduced so rapidly. Things like unemployment insurance and benefits can help, but sometimes it is not enough, and the mortgage may default, leading to a foreclosure.
- Medical Debt: Medical bills can come on quickly and hard. A sudden illness or injury can lead to a massive amount of debt, which can later lead to losing your home to foreclosure.
- Divorce: Splitting up with a partner can be a huge financial burden. Two people living separately usually costs less than living together, so a single person paying for the mortgage can be difficult. This can later lead to foreclosure on a home.
- Loan Rates: If the loan rates of a home are adjustable then rates have the potential to grow in the future. If they grow very quickly then the cost of the mortgage can become too great a burden to bear, leading to foreclosure.
- Credit Cards: Credit card debt can be a serious problem for some, even becoming so serious that it leads to bankruptcy or foreclosure.
There are many things that can lead someone to foreclose on their house, and rarely is it a positive thing. Foreclosed homes do not exist in a vacuum, and it is worth knowing where they come from.