Joe Homs, a Southern California broker with 40 years' experience, explains how foreclosure damages your credit, future mortgage rates, and job prospects. He covers alternatives like loan modifications, refinancing, short sales, and cash offers to stop foreclosure before it happens.
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Are you worried about the possibility of foreclosure and how it might affect your future in 2023? With the recent change in the economy and forbearance ending in most states, we've been seeing an uptick of foreclosures happening. While most homeowners bury their head in the sand, it's important to know what could happen to you if you don't get help. Hi, my name is Joe Homs, and I flipped hundreds of homes here in Southern California. I have over 40 years of experience I've been a broker, mentor, and investor, and I want you to like, subscribe, and share this content with your friends. Number 1, foreclosure can severely damage your credit score. First thing that happens is you stop making your payment. That's going to immediately start hitting your credit score, and your choices after that are to just let it go into foreclosure, which is going to damage your credit score even more. There are people out there that might suggest that you file for bankruptcy. Bankruptcy is another credit score killer. So usually works out short sale, 3-year credit score hit, foreclosure, 5 to 7-year hit, and a— an actual bankruptcy will hit your credit score for about 10 years. So make sure that you get the right advice. Foreclosures on your record can make it really challenging to buy a new home because the lenders look at that and they say, well, wait a second, he's already— or she has already been through this process before. Why are we going to risk this happening again? They may say, well, yeah, we can give you a loan. Currently interest rates are around 6%. But because you have that foreclosure on your credit, we can't give you anything unless it's 10% interest. Okay, so they would have to build in some, you know, extra money in the, in the game for them to be able to give you a loan. So foreclosure can hit your, your credit score and your livelihood for a long period of time. Are you following along? Make sure that you hit that like button and help me get in front of new investors. Foreclosures can impact your possibility even to get a job. Okay, an employer nowadays is going to do a very thorough background check on you, and if they see that your FICO score, your credit score, is very low, they're going to find out what's the reason it's low. Oh, here it is, he had a foreclosure. That just tells them that you may not be as responsible as the next person. that they're looking at, and maybe they're going to look someplace else because they, they, they know that with these type of things come other issues. So you may not be employable. Foreclosure can actually harm your mental health. So you can imagine, if you're not making your mortgage payment, you're getting letters, you're getting calls from the bank, you're getting calls from creditors, you're getting calls from even wholesalers out there that are wanting to purchase your property. That takes a toll on your mental health. So be careful if you get yourself in that situation. If you do, get the right advice and try to get yourself out of that foreclosure situation as soon as possible. There are options out there. Foreclosure is a serious issue that can have long-lasting effects on your future plans. If you're struggling to make your mortgage payment, it's essential to seek help as soon as possible. There are many resources to help you avoid foreclosure, such as loan modification programs, refinance, short sales, or even getting a cash offer for the property so that you can move into the next chapter of your life. Remember, it's never too late to take action and protect your future. If you have any questions or comments, Please leave them down below and don't forget to subscribe. If you want more information on foreclosures, click on this video right here. If you need some help one-on-one, book some time with me. As always, I'm always here to help.
