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Why do homes get foreclosed
While there are too many reasons for home foreclosures, we are here to talk about some of the basic ones that might lead to lose your control over your home. A foreclosure often can happen to any of us home owners due to the reasons, most of the time, beyond our control. Just read the following lines to know what really contributes to the recent trend of home foreclosure.
1) One of the foremost reason for the home foreclosure is owners aren’t able to pay the mortgage. It can happen due to many reasons like the current owner has fallen to the attractive terms of a subprime mortgage and has taken too big commitment initially, which he/she fails to meet as the interest rates and leads to the increased mortgage payments.
2) The state of economy also plays a pivotal role in home foreclosure. As the economy flourishes, prices of houses shoot up but in the recession time their values usually drop drastically that makes the home far cheaper than the mortgage owned on it. In such a situation, the owner is left with no other option but to foreclose.
3) Job loss is another reason for the foreclosure. In the recession, too many people lose their jobs which leave them with no financial support whatsoever. They fail to make their Mortgage payments and the mortgagee asks for the foreclosure.
4) Death of the breadwinner of a family also, at many occasion, leads to a foreclosure. In this case, if the family loses the sole provider of the mortgage payments, it is highly likely that the family loses their home and assets in the foreclosure. However, housing counselor may step in to help wards regain the control provided the surviving spouse is able to work and can pay some of the default through life insurance proceeds.
5) Illness also proves to be formidable reason that leads to the foreclosure. If the home owner or any of his family members falls ill and he receives medical bills worth thousands of dollars, it is but natural that he might not be able to keep up with the mortgage payments. In the other case, if the mortgage payee is out of work due to various medical conditions leading him to extra responsibilities can also lead to a mortgage default.
The other reasons that can lead to a mortgage default is unexpected maintenance expenses, divorce, child support, not paying the bills on time, relocation due to job and so one.
In order to avoid the home foreclosure, people need to stay updated with reasons that lead to it and above all, a determination to live within your means is the surest way to prevent as well as a way out of the trouble.