On Time, Every Time: How Being Late on Monthly Payments Can Affect Your Mortgage
Tuesday May 25th, 2021Share
If you are someone who has a tough time remembering paying your bills, take comfort in knowing that you are nor alone. Many people across the world tend to submit late monthly payments, which significantly impacts their credit. Let us understand the adverse effects of paying your mortgage or other monthly payments later.
Your Credit Score Is At Risk
You probably already know that practically all banks, credit cards, mortgage companies as well as other lenders depend on your credit score to evaluate the risk of lending money to you. If you pay any of these late, including your mobile phone bill or a department score credit card, the result could be negative remarks that land on your credit score. In case you are late several times, or do not repay the late payment, it will cause your score to drop.
Refinancing Can Be Affected
In case you have a mortgage already, a lower credit score could be an issue when you attempt to refinance. Refinancing typically involves taking out a new mortgage, wherein your lender will reassess your risk with your credit score acting as one of the indicators. In case you have been making late payments, you may be left with the option of settling for a higher interest rate or a new mortgage may be declined for you.
Making A Late Payment? Contact Your Lender
In case you are left with no choice but to make a late payment, always call your lender immediately as there may be a grace period where you can avoid penalty. In case that short period is enough for you to make the payment, you will be fine. Otherwise, you can inform them regarding your circumstances and understand the various alternatives that you have.
It is crucial for you to pay your monthly payments in a timely manner, although you may have to make minor sacrifices in other areas. That is because a better credit score will provide you with more opportunities to make positive financial moves in the future. You can learn more regarding monthly mortgage payments by contacting us today.
Whether your upcoming investment represents a threshold-crossing life transition or a strategic acquisition, Charissa can create a plan to suit your needs and personality. Our agents are highly experienced in navigating the maze of today's market from start to finish, including property identification, lending options, negotiations, escrow and final closing.