For many homeowners, foreclosure is a dreaded subject. A strong understanding of the matter, though, can help you make the right decisions in case it happens to you. Find out how a foreclosure can affect everyone. Read on.
When a foreclosure happens, you’ll be forced out of your home. That’s going to affect you and your entire family’s future. Finding another place to live can also prove stressful and expensive.
Decreased Home Values
A foreclosure affects the price of a property. If there are too many foreclosed homes in an area, then that could affect home property values. Increased foreclosure rates can lead to declining real estate prices. That’s a scenario you’ll want to avoid. Considering how much you paid for the home, finding a way to make sure you don’t end up with so much less than the value of the property matters. To find out more about this, consult with experienced foreclosures lawyers in Phoenix AZ.
Foreclosures don’t just have a devastating impact on individual property owners, they also hurt local, state, and national tax revenues. Plunging property values can lead to unstable foreclosure rates in certain housing markets. That can lead homeownership to drop, which can result in a housing market crash. This takes a toll on the property tax revenues taxed by the state.
When there are fewer taxes, then states will need to cut back in public assistance and education as well as transportation programs.
Layoffs and Unemployment
Foreclosures are also hard on lenders. To make sure they cover their bases, they make it more difficult for people to get credit, which then restricts housing construction companies. Some developers may even lay off workers as a result.
Unemployment can lead to less individual spending, which slows down the economy. This is just another way we are affected by foreclosures.
The government spends billions to reduce foreclosures. This has also resulted in a ballooning national debt, as the government borrows money to pump into the economy.
With an increasing national debt, we can expect higher costs to service that debt. That’s going to mean higher taxes for us in the long term.
If you want to know more about what happens when a home is foreclosed, talk to foreclosures lawyers in Phoenix AZ. Contact The Law Office of Larry P. Karandreas, PLLC for an appointment.