5 Most Common Reasons for Foreclosures
Nobody ever wants to run into the situation where their home is up for foreclosure. One way to help yourself from ever having to deal with foreclosure is to be aware of the most common causes behind it. Some of these are easier to avoid than others. It would be ideal for none of them to ever happen, but life moves quickly. Here are the five most common reasons for foreclosures.
Adjustable Mortgage Rates
In one of my other blogs, I explained the difference between adjustable mortgage rate and fixed mortgage rate. The adjustable mortgage rate is attractive at first glance because it is initially lower than a fixed mortgage rate. The problem comes when the market raises interest rate and the homeowner is unprepared to cover the increase in payment. Once a homeowner gets behind on mortgage payments, it is difficult to dig out of the hole.
When buying a home, prospective buyers are not doing so with thoughts that they will become unemployed down the road. People become unemployed for a number of reasons and sometimes it is not even their fault. A company having to lay a percentage of their workers off can put those affected, especially with a mortgage, in an unlucky and unfortunate financial situation.
Medical Expenses and Illness
This reason is the one most people never plan for. Medical expenses can rack up very quickly. Somebody can be healthy as an ox one day, and then something happens that puts them in a hospital bed for a couple weeks. Whether it is a broken bone, immune system failure, or anything else that calls for medical attention, it won’t be cheap and they will need to have money saved up for it. If they don’t have the money saved up, their house may be in jeopardy. This reason alone causes over a tenth of foreclosures across the nation.
Selling a house is not as easy as they make it look on television. If suddenly relocated, that person will have two house payments to take care of until they can get the old one taken off their hands. Sudden relocation often happens because of a job change. Even though a job change usually means more money, if stuck with two house payments, it could be too much to handle and a choice might need to be made between bankruptcy and foreclosure.
Credit Card Debt
Out of all the reasons above, this is the one that can be avoided by adequate planning and budgeting. Sometimes when using a credit card it feels like you aren’t spending any money. This is a mistake made by a lot of people. When people overuse their credit card, they either go bankrupt or they lose their house to foreclosure. By having a budget and sticking to it, you can avoid credit card debt being so substantial that you lose your house.
For any reason, whether on this list or not, your home is being put up for foreclosure, come to the aggressive foreclosure defense attorney in Indianapolis that will fight for you. Foreclosure defense requires an experienced attorney in that field. Common defense techniques in other types of litigation will run afoul of procedural rules applicable to foreclosures but not often used in other types of litigation, and will doom your defense.