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What Can I Do If I Am Behind On My Mortgage?

Jan 7, 2008
When money gets tight and you are going to be forced to be late on your bills first consider what items report to your credit report. Your phone bill, electric, gas, cell phone, water and other similar bills do not report on your credit report.

A late payment for your mortgage will hurt your credit score more than a late payment for a car loan or credit card. Once a mortgage becomes 60, 90 and then 120 days past due, it's very difficult to catch up the arrears.

Extra interest, attorney fees and collections fees can be added to the amount. The borrower must pay a penalty if the payment is made more than fifteen days after the due date.

So, not just the 60, 90 and 120 days, but also just fifteen days can harm your credit score and can eat up your budget quickly.

If you're two months behind on paying your mortgage, you're still safe. You should act soon, however. They would rather work with you than have you give them back the keys to your home.

You have three choices: If you go one more month without paying your mortgage, your current lender will issue you a notice of default. Then, the foreclosure process will begin.

Your lender will usually offer you the option to make up the back payments over a period of time. This is called forbearance.

Call a professional mortgage broker. There may be a better loan product out there that will help you make timely payments in the future.

Let's take a look at some good news now. There are specific lenders called "sub-prime" lenders that have a multitude of options available that can help you straighten things out.

Another great piece of information is that lenders only look at the last 12 months of mortgage history. If you wait out the 12 months (after your negative mortgage payments) then those payments will not affect your credit once back on track.

You can even refinance which may be helpful at this time no matter how good or bad your credit is. The type of financing though, that you may qualify for will probably be less than favorable.

The key to all of this is the amount of equity you have in your home. The more you have the more opportunities you will be afforded. What your lender wants is the money from the home. Therefore, they are more than willing to work with you as long as they can see you are also trying to work things out.
About the Author
Court teaches people through Court's Internet Marketing School and helps people refine their internet marketing strategy.
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