Tag Archives: Mortgage

What Happens When You Miss a Mortgage Payment?

Foreclosure in Draper

Foreclosure in DraperForeclosure is a homeowner’s worst nightmare. And now, it looks like it just might happen to you. Are you about to lose your house?

Whether it’s because you suffered a major financial setback or the mortgage was just too large to begin with, you have missed this month’s payment. Don’t panic, though; the bank isn’t going to just kick you out immediately. There is still plenty you can do right now to keep your home.

A Look at the Foreclosure Process

When a homeowner misses a mortgage payment, a few things happen. First, while lenders usually require you to pay at the beginning of every month, most give you a two week grace period. If you can get together enough money to pay before the 15th, then there is no harm done at all.

Once the grace period passes, though, things start to get more serious. Many lenders will wait until your payment is 30 days late before reporting you to credit bureaus, after which your rating will take a significant hit. You’re now considered in default, and will soon receive a demand letter informing you that your house will be foreclosed if you do not pay.

After around 45 to 60 days, your credit score plummets again, and you will formally be put on notice. Another letter will arrive, stating the amount you owe plus any penalties incurred. If you still do not pay within the next two or so weeks, the foreclosure process will begin.

What Happens Next?

The actual foreclosure process depends a lot on where you live. Some states require lenders to go through court, while others are more lax. A number of factors will determine whether you lose your house in three months or two years. Some lenders will also let you sell the house yourself, since it is usually more cost-effective than them selling it at an auction.

If you want to avoid it getting to this point, then you need to act quickly, according to the experts from City Creek Mortgage. The first step should be to contact your lender; they will be happy to work something out, such as delaying payments for a few months or letting you refinance to a lower monthly payment.

The US government has two federal programs that can help: HAMP (Home Affordable Modification Program) and HARP (Home Affordable Refinance Program). You can also get in touch with a real estate lawyer to explore your legal options.

Questions to Ask before Diving into Salt Lake City Mortgage

Mortgage

Mortgage Compared to Seattle, Salt Lake City gives you more leverage in terms of cost of living. To be more specific, mortgage (including interest) is about $800 lower for someone who earns at least $50,000 annually. That doesn’t mean you can submit your application right away. It takes more than the idea of affordability to consider a mortgage.

To know if mortgage is the right decision for you, ask yourself these questions:

How long do I want to stay?

Of course, you can stay in the house for as long as you want, but if you want to maximize your loan, particularly your amortization, live there for at least 5 years. This also means if there’s any chance you have to move within that period for your job or any other reason, then renting is a more economical option.

What’s your credit report?

Loan requirements vary among lenders, but all of them need you to submit your credit report, a piece of document that tells them if you have the capacity to pay and if you’re trustworthy.

Each report comes with a credit score determined by several factors, including amounts owed and the type of credit obtained. For lenders, 300 is a bad score, while 620 is enough to consider you for a home loan. If you want to enjoy the best rates, however, get at least 720.

Can you afford it?

It doesn’t matter if you have a high credit score. If you can’t afford the mortgage yet, don’t even try. Mortgages take as long as 30 years to pay, with thousands of dollars in interest repayments alone. If you default, the property is repossessed, and you may have to file for bankruptcy, which can stay on your credit report for at least seven years.

Can you pay the closing costs?

Many homeowners constantly think about principal and amortization without even considering closing costs. Think about the amount you need to settle before you can end a mortgage or apply for refinancing.

Closing costs can be ridiculously expensive, so you need to prepare. There are no cost mortgages in Salt Lake City, though, a refinancing method where the lender pays off the closing costs, extends the new loan, and gives you a higher interest rate. Take note, this setup doesn’t work for everyone. Consult a knowledgeable lender before making a decision.

While a mortgage entitles you to live in a home that you like, it’s also a responsibility. Take it seriously.