An old saying advises you to always look for the positive in any situation. Though this is generally considered to be good advice, in certain situations people not only have a hard time finding the bright side, but are even unwilling to consider looking for it. Losing a home to foreclosure can be one such situation. The pain and embarrassment, not to mention the financial loss, of foreclosure is enough to drive many people into a deep state of depression. But, despite the abundant negatives foreclosure can cause, there can be a bright side. Here we take a look at some of those possibilities.
Start over in a new place – Often times people desire to move to a new location but find that they are essentially trapped in their homes. Perhaps the market does not have enough qualified buyers. Or maybe they don’t have enough equity in their homes in order to sell it. This kind of situation can present a homeowner with a chatch-22: stay in the home and you can’t live out your dream of moving to a new locale; leave the home and you will have to deal with the negative consequences of foreclosure. But, when the foreclosure process has already terminated, this can represent a great opportunity to start over.
Get out of debt – A recent news story acknowledged what millions of American homeowners in foreclosure have known for years: that fact that you aren’t paying your mortgage when you are in foreclosure frees up a lot of extra cash, cash which can be used to pay other debts. Of course, this is not meant to be a recommendation that you let you house payment go in order to pay off credit cards. But, after finding themselves in foreclosure, many homeowners have paid off other debts with the money they would have been using to pay their mortgages.
Learn to live on cash – Foreclosures are generally very hard on your credit. There is hardly a more damaging thing a person can do than to allow their home to be repossessed. But the upshot of this is that many people fell into foreclosure in the first place as a result of not taking good care of how they allocated their finances and credit. Going into foreclosure can serve as a wake-up call. You can decide to learn from your past indiscretions, if that is the reason you found yourself in foreclosure, and make changes so that a similar situation does not befall you again. You can learn to use cash to make the majority of your purchases, and to reestablish your credit by seeking small loans and using credit wisely.
This is not meant to be a list of feel-good tips. Rather, it is meant to give you some ideas of how to maximize an otherwise unfortunate situation. If you are losing your home to foreclosure, or have already lost it, remember that you will be able to buy a home again in a few years if you take steps to reestablish your credit. In the meantime, see if one or two of the above suggestions can help you focus on the positive side of foreclosure.