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You can finance almost any major life purchase you desire, such as a vehicle or a home. However, in order to obtain the car or home of your dreams, you must rely on credit to finance the large sums needed to make such a large purchase possible. Additionally, you can usually obtain credit cards to fund the purchases you make day to day.
It is quite easy to become financially overextended and fall behind on the payments for your home if you’ve had a change in your income due to job loss, or simply have too many monthly bills to continue paying your mortgage consistently each month. While this is a common thing that happens to many people, there are very severe consequences when you become unable to pay your mortgage, including late fees, damaged credit, and even losing your home to foreclosure.
When you borrow a large sum of money from a lender to finance a substantial purchase such as a home, you are required to sign a contract that gives the lender options should you fall behind on your payments, and default on your loan. If you do not stay current on your mortgage payments or property taxes, you can risk damaging your credit, and even losing your home through liens or judgments.
As a homeowner, you are responsible for paying property taxes along with your home mortgage each month. Many lenders build property taxes into your monthly payment and remit those taxes on your behalf through an escrow account. However, if property taxes are not paid through escrow as part of your loan agreement, then you are responsible for paying them yourself each month.
In our American society of abundance and quick gratification, it is easy to obtain large life purchases such as cars and houses by leveraging credit and financing payments over a period of years so you can have the things you need and desire in your life.
There are many life events that can change and impact your financial circumstances suddenly. Such changes can often make it difficult for you to manage all your bills and other financial obligations. If you own a home, then you may find yourself in a situation where your mortgage payment is just too high for you to feasibly pay any longer.