Home Repossessions: Five facts you may not know

Did you know that homeowners who lose their homes to repossession may never again qualify for a mortgage? After repossession has taken place, some individuals do manage to regain their financial footing eventually. However, their credit ratings will forever be affected by the repossession, and they may never again be able to purchase their own homes.

In most instances, home increase in value over time. Thus, as homeowners continue to repay their mortgages, their homes steadily grow in value. Moreover, as homeowners gradually pay off their mortgages, the equity in their homes increases. However, when a home is repossessed, homeowners do not only lose the property itself, but also the equity accumulated in it, and the appreciation value that they would have benefited from had they sold the home themselves.

Even if you’ve found alternate accommodation and are able to pick yourself up after repossession, the trauma of losing your family home could have serious emotional repercussions on the whole family. Perhaps your children will have to move to different schools, or you and your spouse will be forced to find new jobs. Being uprooted from the comfort zones you’ve always known is likely to impact severely on your emotional wellbeing.

In some cases, individuals who are evicted from their homes may struggle to find employment or retain their current jobs. Many employers expect their staff members to maintain good credit histories at all times. Thus, homeowners who have lost their homes to repossession may lose their jobs – and those seeking employment may battle to gain the trust of prospective employers when their repossessions are revealed.

The stress and trauma of repossessions is likely to have a severe psychological impact on individuals and families. Many individuals who have experienced repossession have reported a loss of self-esteem, depression and embarrassment when interacting with friends, family members and colleagues.