Home foreclosure is frequently discussed with a view to finding a cheap property to buy, but why does a property go into foreclosure and how can you ensure this does not happen to you?
When we talk about why a property goes into foreclosure most people would naturally think it is due to failure to pay the mortgage on it, and this is true. However, this is not the only reason. Here is a couple more:
A constant failure to pay property taxes. If the homeowner falls behind on their property tax payments, this may result in the house being ceased by the government.
If there are unpaid contractor bills, the property may also be eventually ceased.
Homeowners’ association neighborhoods (or HOAs) are common now throughout the United States. Anyone living in a neighborhood like this must pay the fees that are associated with the HOA. There are some States where Homeowners associations wield a great deal of authority which means that a failure to pay these fees could result in foreclosure.
How can you avoid foreclosure? Of course, some circumstances are beyond our control but to avoid running a future risk of foreclosure, plan well before you even purchase the property. Become familiar with property laws and requirements for the location you are going to live in and get to know your rights as a homeowner as well as the rights of the lender you will be dealing with.