If you abandon your property and the associated financial obligations (e.g.,mortgage, property tax, etc.), it will certainly adversely affect future property purchases and much more. Let’s take a quick look at some of the negative implications.
First, if your property is foreclosed upon, you’ll scar your credit rating with a serious black mark … one that can last up to 10 years. The effects can be far reaching. It can impair your ability to use credit for everything from buying a new car to using credit cards to renting an apartment and securing utilities without a deposit. If you put yourself in the lender’s shoes, do you think they will want to do business with someone who has shown an unwillingness to meet their financial obligations? If you’re able to make the payments without a major struggle, why not continue to do so? It will likely take years for your property value to catch up with your mortgage balance, but in the meantime, you have a place to live and you’ve spared your reputation and credit.
On the other hand, if the payments are pushing you over your financial limits, consider asking for help. The government’s Making Home Affordable program was launched to help folks avoid foreclosure. A counselor affiliated with the National Foundation for Credit Counseling (www.nfcc.org) might be able to help you build a budget along with a plan to get you over this hump and meet your obligations. Of one thing we are certain, foreclosure is a huge financial decision that can haunt you for years to come.