Each year, millions of homeowners find themselves facing the unimaginable reality of losing their home to the foreclosure process, leaving them scrambling for ways to get fast cash for their houses. If you have never had a home go through foreclosure, you might not understand quite how homeowners find themselves in this unfortunate situation. To help provide some clarity on the issue, in today’s post, we’ll review what foreclosure is as well as take a look at some of the most common reasons homeowners find themselves struggling to pay their mortgage.
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What is Foreclosure?
In recent decades, millions of homeowners have had the unfortunate experience of going through foreclosure on their home. Because this real estate issue is so prevalent, it is likely that you have friends and family who are facing foreclosure, even if you aren’t yourself. So, what exactly is foreclosure? It is the legal process in which a lender tries to collect the balance of a mortgage loan through the seizure and sale of the property because the homeowner has failed to make his or her monthly mortgage payments. This process frequently takes place without any consideration as to why the homeowner has been unable to afford his or her mortgage.
Five Common Causes of Pending Foreclosures
As you might have guessed, there are many reasons why a homeowner might face foreclosure, and we’ve highlighted the most common ones below:
Unexpected Job Loss
Although the percentage of unemployed Americans has decreased steadily throughout the last decade, there are still a large number of people who are struggling to find gainful employment. In fact, a recent report from the Department of Labor indicates that more than 200,000 Americans have open unemployment claims. If you have recently lost your job unexpectedly, or if you have been demoted in a recent reorganization, you may find it difficult to pay your monthly bills, including your mortgage, placing you at a higher risk for foreclosure.
Increase in an Adjustable Rate Mortgage
About 10 years ago, millions of Americans found themselves facing foreclosure as their payments on their adjustable rate mortgages (ARMs) went through the roof. If you’re not familiar with this type of mortgage, they are a type of home loan that has an interest rate which can fluctuate periodically depending on economic indicators. While interest rates may go down, they may also go up, leading to unpredictable payment amounts. This leads to disaster for many homeowners, many of them are forced to foreclose when they cannot afford the increased payments.
Change in Family Dynamics
Life can definitely throw some curve balls our way, and some of these come in the form of changing family situations. For example, a recent report indicates there were more than 800,000 divorces annually in America just a few years ago. Aside from divorce, people may experience the death of a loved one that forces them to reevaluate their financial situation. Many homeowners rely on the income of a spouse or loved one to make their mortgage payment, and if this source of income is reduced or eliminated, foreclosure could be on the horizon.
There are several factors for buyers to consider when they purchase a home, including their anticipated income and the ability to afford the projected mortgage payment. Aside from job loss, there are other circumstances that can affect the size of your paycheck, and unexpected health problems can cause a financial burden for some people. If a homeowner cannot work at his or her full capacity, or if he or she cannot work at all, it can become difficult to make monthly mortgage payments.
Unexpected Major Home Expenses
Owning a home doesn’t always go as planned, and some homeowners may feel like they are between a rock and a hard place if their home is damaged in some way. Unexpected situations can be catastrophic, and everything from fire, smoke, and water to severe weather can cause significant damage to homes. Homeowners insurance will often cover the repairs for events that were unforeseeable, but it may not cover everything. For some homeowners, this gap in coverage could make it difficult to afford repairs and the mortgage simultaneously.
Fast Cash for Homes in Kansas City
Are you worried that you might be unable to continue paying your mortgage? Selling your home for cash to an experienced home buyer might provide the financial relief you need to start fresh and get the mortgage company off of your back. Cash 4 Kansas Homes prides itself on paying fast cash for homes to help relieve homeowners of burdensome homes and we would love to help you. Call our team at 913-276-0769 today to get started!