what happens if i cannot make my mortgage payment - If you are a home owner who has found yourself unable to pay your mortgage payment the first thing you will want to do is to contact your mortgage provider and let them know what is going on.
Delaying what you know to be the inevitable will only reduce the options your lender will have for you. As soon as you know you won't be able to pay, call!
Too often people who are unable to make their mortgage payment wait until its too late to contact their current mortgage lender. You do not want to wait until you have fallen 2, 3, 4, or even 5 months behind on your mortgage to contact your lender.
You are not the first person to be in this situation and it is in both your and your lender's best interests to work something out that will suit the both of you.
Failure to make your mortgage payment will result in your lender reporting the mortgage lates to the credit reporting bureaus. Your initial late payment may result in a 30 day late which can bring your FICO scores down. If you do not clear the delinquent payment, then 60 day, 90 day, and 120 day lates may be reported as well which can lead to possible foreclosure of your home.
If you are expecting that you are going to miss your next mortgage payment, calling your lender only helps a little bit. Inability to make this payment generally means that the payment is too high for your current financial situation, and you really need to immediately contact a mortgage professional to discuss refinancing quickly before the payment is missed. With each successive missed payment, your refinance options are limited exponentially, and you will wind upo paying MORE not less to dig yourself out. Refinance ahead of time when money getstight and get into the lowest payment mortgage you can qualify for. Missing even one payment will eliminate you from eligibility for the lowest payment option type mortgages, which can be a lifesaver when you need the breathing room.
Sometimes it's best to refinance before you become more than 60 days late. usually some unforeseen situation causes you to be 1 month behind. from that point on, it's almost impossible to catch up. if you refinance, you get a fresh start and get to miss at least 2 months of payments
If you have equity in your home you stand to lose your down payment and years worth of mortgage payments. If you do not see your situation improving soon, it may be time to contact a Realtor to see if selling your home quickly is a better idea than losing it to foreclosure.
What Happens When I Miss Mortgage Payments? - What Happens when you Miss Your Mortgage Payments?
If you miss one or two motgage payments, you will be required to repay the amount you are behind as soon as possible. Penalties, late charges, and legal fees may be added to your mortgage balance, and these can be very substantial.
If you miss 3 mortgage payments, you are on the road to foreclosure. Foreclosure is the legal right of your lender to repossess or assume ownership of your home. When foreclosure happens, you will have to move out of your house, giving up all title to it. If you owe more than the value of your property, your lender might pursue a deficiency judgment against you, which means that not only do you lose ownership of your home, you also may wind up owing your lender or servicer additional money after youve been removed from the property.
Missing a mortgage payment can be very detrimental to your credit score. Because your credit and credit scores can be used and looked at when you apply for jobs (with some companies), to assist with calculating homeowner's insurance premiums, auto insurance premiums, to apply for loans, to apply for credit cards, to refinance your home, and so many more things, your whole life can be affected by missing mortgage payments. Therefore, it is important to do what you need to in order to make sure that you are making your mortgage payments on time, or at least before they become 30 days past due. If you are aware that you are going to be late on a mortgage payment and you have no other options to come up with the money for the payment before it is late, then you need to contact your mortgage lender immediately and let them know. There may be options for you with them so that the payment does not show up as being late.
Foreclosure is extremely serious, and can make it very difficult for you to obtain any type of credit at all in the future. Missing your mortgage payments reduces your credit score, and a foreclosure or evidence that you have been 120 days late on your mortgage will make it very hard to qualify for a refinance or a new purchase home loan in the future as well. Avoiding foreclosure by getting caught up is extremely important. You may be able to refinance to prevent or avoid foreclosure if you have a minimum 30% or more equity in your property.
If you think you may be late with a mortgage payment or are facing financial hardship call your lender immeadeately and let them know. Most lenders will be willing to work with you and develop a payment plan to help you stay current. They may not be as accommodating when you call them with a 90 or 120 day late.
When you miss a mortagage payment it can be very damaging to your fico score. Many times if you are behind 2-3 payments the foreclosure process will begin. A Notice of default will be filed at the county records office. In many cases you will still have time to save your home.
Even if you are just 32 days past due, your lender may not accept just 1 payment. They may require you to immediately bring your account up to date. It is very important to keep in contact with your loan servicer to work out a payment arrangement.
When you miss a mortgage payment, your FICO drops dramatically. A mortgage is the heaviest weigh on your credit. Try to be as current as you can on your mortgages whether they're 1st, 2nd or HELOCs. If you are short on funds, go late on automobiles and credit cards before your mortgage.
Depending on where the property is located, judicial foreclosures are common in some states while non-judicial process are customary in others. The basic difference between a judicial foreclosure and non judicial foreclosure is that the former goes through the court process whereas the latter requires no court actions.
If you miss your payment, you can send it in and most banks will accept your payment if your payment will bring the loan current.
Late payment - "How do late payments affect me?"
It is very important to make sure that you make all of your mortgage payments on time. Not only do late payments lower your credit score and cost you money in late fees, they can affect your ability to buy a new home or refinance your current one. Lenders will look at your mortgage or rental history over a period of 12 to 24 months when determining your interest rate and what LTV you are eligible for.
A lot of times, many mortgage companies will work with you if you are having payment problems. Please contact them if money is getting tight so they can come up with a situation that fits your situation.
How late is your payment? If you are less than 30 days late the incident probably won't show up on your credit report. You will still have to pay any late fees, If you must be a few days late on your payment its very important to contact your lender to let them know that the payment will be delayed and when exactly it will be mailed.
Late payments, as far as your credit report are concerned, are at least 30 days late. A late payment for your mortgage will hurt your credit score more than a late payment for a car loan or credit card.
It will be important to explain you payment history if you have been late in the past. An letter of explanation will most likely be required by the lender of any new line of credit.
If one of your accounts have gone into collections, you can pay these accounts off through your new loan. Depending on how long ago the account went into collections, some lenders will not force you to pay it off through your financing process. It will depend on when it went to collection and how much the amount is. Check with your loan officer for more details.
What payments are were you late on? In the mortgage industry credit card late payments aren't as important as mortgage late payments, but both should be avoided at all costs! If you must be late on one payment, make sure it is not your mortgage!
When money gets tight and you are going to be forced to be late on some of your bills first consider what items report to your credit report each month. Normally your home phone bill, electric bill, gas bill, cell phone bill, water bill, and other similar bills do not report on your credit report. If you absolutely have to be a few days late on one or more of your bills, it may be a good idea to start with the bills that do not report to your credit report first. Don't let these items get too far behind because these items could be shut off or even worse be sent to collection after awhile, at which time they could possibly be report to your credit report. Please remember that the above information is not stating that it is ok to not pay your bills or pay them late, but is only providing you with some information that may be able to help out as a very short term fix to keep your credit rating up.
Once a mortgage becomes 60, 90, and then 120 days past due, it is often very difficult to catch up the arrears. Extra interest, attorney fees, and collection fees can be added to the arrearage amount. Additionally, it becomes more & more difficult to obtain a refinance loan.
MOrtgage lates are one of the most harmful delinquent accounts that can be found on a credit report.
120 Days Late Mortgage Payment - If you fall more than 90 days behind on your mortgage, you run the risk of foreclosure, where your lender will demand satisfaction of your entire mortgage and may sell your property to do it. If you allow the loan to fall 120 days behind, a 120 day late will be recorded on your mortgage, making it nearly impossible to refinance and save your home. However, if your first mortgage is for less than 60% to 65% of the value of your home, there is help available no matter what your credit looks like.
Foreclosure - "What is foreclosure?"
If you have been late in the past, many lenders will initiate foreclosure proceedings when you're 90 or even 60 days delinquent on your mortgage.
These foreclosure proceedings are sometimes referred to as preforeclosure and foreclosure is when the property is actually foreclosed on (sold or taken).
When you purchased your home, chances are you took out a home loan and your lender took a security interest in the property. In the event that you cannot make your mortgage payments, this security interest gives your lender the right to foreclose--auction off your house and keep the proceeds in order to recover its investment. And, if your property cannot be sold for what is owed, a deficiency judgment could be pursued against you. Both a foreclosure and a deficiency judgment could seriously affect your ability to qualify for credit in the future.
A foreclosure has considered to happen when your payments have gone 120 days late. Once you hit that mark, many lenders consider the home to be in foreclosure.
With a foreclosure on your credit, not only will it seriously affect your credit score, but it will also affect your ability to buy another home, to obtain a car loan, and to qualify for any other type of financing out there. Therefore, if you begin to fall behind on your mortgage weigh your options heavily and seek alternative to having your home foreclosed on. Some ideas are to see if you can get some help from a parent or family member, sell your home, borrow from a retirement or other investment account, or maybe pick up a second job to help get yourself caught back up on your mortgage payments.
How do I stop foreclosure? - There are programs available to help stop foreclosure regardless of your credit situation. Time is critical and you MUST act fast to stop foreclosure.
A sale-leaseback may be an alternative if you do not have quite enough equity to refinance.
Before your house can be foreclosed on, a notice of default must be sent to you. This is a notice that demands back payments are brought current. If the payments are not made current within the time given, the lender will begin the foreclosure process. We have programs available to help stop the foreclosure.
Before foreclosure proceedings begin on your house you must get in touch with a mortgage broker to expedite your available options before you lose your house. There are lenders out there that will do foreclosure bailouts so long as a Notice of Default is not filed on the property. Refinancing the property if there is equity is a much better alternative to foreclosure. You can also sell your property and not have the foreclosure hit your credit report.
If you feel that your situation will not improve in the immediate future you should consider selling your home while there is still time. By selling your home you get to keep most of the equity you have built. Depending on how far into the process of foreclosure you are you may have to talk to your current mortgage company about doing a short sell. If this is the case you should contact a Realtor in your area that specializes in listing distressed properties.
When you contact your mortgage servicer, you can try to work out a payment plan to bring your back payments current. Not all mortgage servicers are willing to work this out with you, but there is a chance that they may. They do not want to foreclose on your home because that means that they will lose money in the long run.
Homeowners can file a Chapter 13 which will enable them to pay back their arrearage over time. This option works best when the cause of the late payments was temporary and the borrower can now afford to pay the regular payment.
The foreclosure process is a very stressful and time sensitive issue. But you do have options. There are hard money loans to help you catch up but there are also options you can work out with your current lender.
Reinstatement-This is the amount that you have to pay to your mortgage company in order to bring your loan current. Your loan delinquency will be taken into account, as well as other unpaid fees and costs associated with your loan. (You can look into getting a hard money loan to do this)
Forbearance -During what is called the forbearance period, the lender agrees to accept less than the full amount for a temporary period. This happens only if you show the bank or the mortgage company that you have sources for funds that can let you bring the mortgage current at a future date. (Usually you have to be a couple payments behind for them to approve you for this)
Note Modification -Although you are unable to settle your previous accounts, the lender might agree to modify your mortgage if you make your regular payment now. (Often requires supervisor approval)
Repayment Plan -A repayment plan allows you to repay the amount you owe within a fixed period of time, in which your unsettled dues will be combined with your regular monthly payment. (Hard to do in tough times, but they may allow you to skip a payment or 2 with the understanding you will pay your regular payment plus a quarter of what you missed)
Short Sale - The lender will allow you to sell your home, even at a loss to them. So if you don't have enough equity to pay prepays and commissions this may be an option to you. Make sure you work with a realtor that specializes in selling distressed properties.
Deed in Lieu of Foreclosure -In a deed in lieu of foreclosure, the lender agrees to release the debtor from any liability on the loan itself. This agreement is usually reached only when the debtor transfers his or her property to the name of the lender.
A private loan from a friend or family member could be a last resort to save your home from foreclosure.
Remember, if you are in danger of foreclosure, you are past due and need help, there are options available to you, but you must act quickly. When you are facing a foreclosure, you are not only in danger of losing your home- you are in danger of doing severe damage to your credit score that will be very hard to repair.
Before you consider a short sale or Deed in Lieu, determine how much equity you have in the property. Think about how much you owe on your mortgage, and then divide that number by how much you think the home is worth. If your mortgage balance on your 1st mortgage is less than 70% of the value of your home, you might be able to save your home through a foreclosure refinance.
One way to stop a foreclsoure is to make up all the back payments. There are various ways, but the best options is to speak to a lender representative. The representative will be able to guide you and help you on stopping the foreclosure.
Foreclosure Bailout Mortgage - A Foreclosure Bailout Loan is a mortgage designed to save homeowners from having the properties being foreclosed upon by their banks. it is basically a refinance loan. The home owner takes out a mortgage to pay off the current loan thats in default.
When considering a foreclosure bailout mortgage, make sure you are working with a specialist in this area. Anyone in this situation is at risk of loosing their home so mistakes or time delays could have negative impact to the home owner. For example, the Foreclosure lenders know the specific laws and can determine if your current lender is doing everything it should be to help you avoid foreclosure.
Foreclosure Bailout Refinances are based on the value of your home, and how much you owe your current mortgage companies. For this reason, most of these loans require an appraisal and an additional property valuation to complete.
A foreclosure bailout loan should be viewed as step one of a two step process to an affordable mortage payment. Expect a high interest payment on this type of mortgage bewcause of the risk factor. Once you have 12 months of on time new mortgage payments, you can then refinance into a low rate long term mortgage.
Most foreclosure bailout loans require at least 25% equity in the home and credit scores over 500. While many potential borrowers do not fall into this category there are some that do and can benefit from the bailout programs.
Any time a mortage goes 120 days late, most banks will consider that loan in default.
It is important that you have contact information for your current mortgage company's. Your mortgage professional will need to obtain payoffs quickly for all liens on your property to determine your new loan amount. Giving complete documentation to your mortgage professional will expedite your new loan efficiently.
A forclosure bailout loan will be costly and typically carry a higher interest rate because the lender's risk is so high.
When compared to the option of selling your home or loosing the home if foreclosure proceedings are completed, the higher interest rate associated with a bail out is usually the best alternative. These bail out programs are a form of refinance, they are not a lease back program. You still maintain ownership of the property.
In some rare cases you may be able to pay off additional debts as part of a foreclosure bailout/refinance. If you have enough equity in your home this may be exactly what you need to get back on track.
When taking a forclosure bailout loan strongly consider paying the points to remove the prepayment penalty. This will allow you to fix your credit and get in a better loan quicker.
You want to contact a Mortgage Professional as soon as you feel your home is in jeopardy, the longer you wait the more your credit becomes affected and the harder it is to get you into a more stable situation. Time is the key to saving your home.
Be cautious of immoral predators if you are facing foreclosure. Many companies see your bad fortune as an opportunity to strip any remaining equity from your home, often leaving you both homeless and penniless. Carefully research and verify any company that is offering assistance, especially if the offer seems too good to be true.
The type of lender you are looking for in a foreclosure bailout is called an equity lender. They lend based soley on the equity in the home and not necessarily your credit score or credit history. This means they are protected by the higher risk should they have to take the property back. These are usually short term loans designed to keep someone from going to foreclosure. This allows you time to list and sell your property or get back on your feet again and refinance.
Many lenders will lend as soon as 1 day after bankruptcy discharges.