| One of the most common things I hear when a | | | | balance, but your now derogatory mortgage |
| prospective client contacts us for a mortgage | | | | credit will force you into a high rate. If you need |
| refinance is "I just missed a mortgage payment | | | | the cash to pay off bills and improve your credit |
| and I want to refinance before it's too late". When | | | | urgently, or to purchase a home in a new area |
| I ask them about their credit, most of them reply | | | | because you are relocating for work, you can |
| "Oh I pay everything on time, I just got behind | | | | wind up in a horrible Catch 22, very often |
| this one month on the mortgage". | | | | disqualified for financing entirely, or with financing |
| It breaks my heart to tell them that in many | | | | so unaffordable that you would rather not. |
| cases, it already is too late. The reason is simple if | | | | So what can you do about this? If you do better |
| you really think about it: If your home is your | | | | with automatic payments, sign up for direct debit |
| biggest investment, your greatest potential asset | | | | payment with your lender, or arrange for your |
| and your largest current liability, there is nothing | | | | bank to automatically pay your mortgage every |
| more important than showing that you are able | | | | month on a specific date which far enough ahead |
| to make the payment on it every month. If you | | | | of the due dates for your other bills that you |
| are in a cash crunch, you're better off missing or | | | | won't be tempted to pay something else. The |
| underpaying almost any other payment, such as a | | | | day after payday is a great day to do it. And the |
| credit card bill, even your utility bill, instead of | | | | date should be far enough ahead of your due |
| missing or even delaying your mortgage payment, | | | | date that the bill is paid and posted on time. It |
| because missing one mortgage payment can cost | | | | might hurt that first month, but it will even out |
| you tens of thousands of dollars over the years. | | | | once you get used to the new schedule. |
| When you miss a mortgage payment, your credit | | | | And if you are even thinking that you might miss |
| score may not go down dramatically. But your | | | | a mortgage payment, call up a loan officer, and |
| mortgage credit quality will take a serious beating, | | | | not one who works for your current lender, and |
| and you'll carry it around for years. When you | | | | get refinanced today. Not only will this put a little |
| start out with a mortgage, regardless of what | | | | extra cash in your pocket and help you pay off |
| your FICO credit score is, you are rated an "A", | | | | your other bills, but it will usually allow you to go a |
| meaning you make your mortgage payments on | | | | few extra weeks without making another |
| time. If you miss a payment, and even if you're | | | | payment out of pocket. In fact, for qualified |
| just late enough to qualify as 30 days late, the | | | | borrowers, we even have Zero Payment & |
| lateness is recorded and you will become an "A-" | | | | Zero Interest for 90 Day loans which are perfect |
| or a "B". Just one mortgage lateness can keep | | | | for people who are at risk of missing their next |
| you out of the refinance market for up to two | | | | payment. Because there are no payments for up |
| years by automatically locking you out of the | | | | to 90 days, this is a very popular product |
| lowest payment programs such as Option ARMs | | | | amongst our customers. Option ARMs and |
| or low-rate fixed mortgages, and you can forget | | | | Fixed-Rate Option ARMs (Hybrids) are also |
| about stated income programs, you will now have | | | | excellent products for people who are having |
| to prove where every penny comes from and | | | | trouble making ends meet temporarily, but expect |
| you'll need more of them too. If it sounds a bit | | | | to get back on their feet within a few month sor |
| like high school, it is, but this time its for keeps. | | | | a few years, respectively. Loans generally take 15 |
| Keep missing or delaying payments, and you'll | | | | days to close, so you really need to think ahead a |
| quickly see your mortgage quality decline to a "C" | | | | little bit, which is hard for all of us. But instead of |
| or "D", which could prevent you from refinancing | | | | freezing up, or scrambling around looking for |
| entirely by eliminating your eligibility from even | | | | money, call up an experienced professional and |
| standard rate programs. I have seen customers | | | | get out of that jam before you get into trouble. |
| who started out at 6% wind up at 10% or more | | | | You're better off dealing with the issue in the |
| solely because they chose making payments on | | | | present instead of regretting the past. And no |
| cars or credit cards over making their mortgage | | | | matter what, make sure you satisfy your |
| payment on time. | | | | mortgage payment obligation. Everything else on |
| This hurts the most when you refinance or are | | | | your credit report can be repaired, negotiated, but |
| ready to buy a new house, because you are | | | | not your mortgage lates. Don't wind up in a |
| usually borrowing more money than you were | | | | situation like many of my callers are in, ready to |
| previously, either to pay off bills or make home | | | | dance but too late to the party, plan ahead and |
| improvements, or because you're getting a bigger | | | | as always, protect your financial future today! |
| house. So not only are you moving to a higher | | | | |