It is not easy these days, cost of living has sky rocketed (Yeah cantelopes for $4.00 each) we wonder if we will have a job tomorrow (My good friend just got let go after 23 years of service) and (at least) my dollar does not seem to be buying everything I need to support my family, let alone pay my bills.
So I make a choice, food on the table versus paying the mortgage on time. Should be an easy choice right? Wrong!
You know the phone calls will start and you know they are going to charge a late fee which will make it even harder to catch up come next month. After all living paycheck to paycheck seems to be the new normal.
I tried the Obama bail out programs, I went to the websites to see if I qualify I checked to see if my mortgage was owned by Fannie Mae or Freddie Mac ( I found out that even if your loan does not show up on these websites Fannie or Freddie can still own your loan so you always want to double check with your current lender) The problem is the banks don’t seem to want to help or maybe the people they hired don’t know what they are doing. Either way relief is just not in sight.
For most of us I think the fear comes from not knowing what can happen, the consequences if you will. The Loathing comes from finding out the consequences of being late and the disgust we feel when no one seems to care.
If you pay your mortgage after the 15th but before the 30th day will earn you a late fee of 5% of your payment amount (in most cases) which of course will make next months payment that much more.
Being late more than 30 days on your mortgage will impact your credit. Your lender will report your mortgage late to the bureaus (Equifax, Experian, and Trans Union) Once your mortgage lender does this your fico score will drop. You may be thinking who cares, but when your mortgage lender reports this late the majority of your other creditors that you may have credit cards with etc., will more than likely immediately lower your credit limit that you have with them and ready for the good part……Increase your Interest Rate!
Talk about the double Whammy. You thought you were having troubles before? Now your credit card payments have just increased, your credit limits have decreased possibly to the point where you can’t borrow anymore and your fico score just plummeted which will now make you ineligible for at least two of the Obama programs that you may have been eligible for.
If you believe you are eligible to refinance because Fannie Mae or Freddie Mac owns your mortgage and you are having troubles making your house payment before you go late on your mortgage or your credit cards, it may make more sense to possibly be late on bills that don’t show up on your credit immediately like a phone bill or gas bill. Don’t get me wrong if you fail to pay them and the account goes into collection it will be reported on your credit, but, if you have cut your expenses back as far as you can and are stilling having problems making ends meet, the phone company will not report you late if you pay them late. This may just give you sometime to see if you can qualify for a lower payment with a refinance even if you owe more on your home than its worth!
HAMP and HARP are just two of the programs currently supported by the Obama Administration, check them out one may be right for you.
As always any questions or comments are appreciated.
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