Keep your mortgage current
There is a set date for monthly mortgage payments, usually the first of the month. The payment is considered late if no payment is received by the due date and the mortgage lender charges a late payment fee if the money is still not received two weeks later. The fees and charges vary from lender to lender. Most mortgage lenders allow the payment to be made, along with any late fees assessed, before the next due date. But be aware, as if there are more than two mortgage payments due, the home is in serious jeopardy. All payments and late charges MUST be remitted before them money is accepted and the mortgage is considered current again, with the exception that specific arrangements are made with the lender. If mortgage payments get behind, the mortgage lender will be more than willing to work out a practical plan that will help repay the debts, and make the loan current again. Communication is important as well as constantly evaluating the financial situation.When three or more mortgage payments are due and still unpaid, the loan will be passed off to the lender's attorney where foreclosure proceedings start. In this case, the entire balance of the loan is due and must be paid immediately. No lender wants to reach the point of foreclosure on a mortgage. Foreclosures cost them more money than they can make back from a foreclosure sale. Lenders do not foreclose on a home to make money. On the contrary, they are limiting their losses on a defaulted mortgage loan. In addition to the loan payments due, legal fees could be tacked on and incurred by the lender. At this point, there is serious danger in losing the home. The willingness of the mortgage lender depends on past payment records. If a consistent pattern of late payments, or even skipped payments, the lender will not be as willing to help out the mortgage as a history with timely payments and no serious defaults.
If it is known that mortgage payments are falling behind, or will likely fall behind in the future, there are some steps that could be taken before talking with the mortgage lender about alternative payment arrangements.
First, prepare a monthly list of income and expenses. It is important to be realistic with these numbers, based on the current financial situation. Also, a complete disclosure package should be compiled that shows assets and liabilities (these include all debts and monthly payments and when they are due). Pay stubs, unemployment check stubs or other proof of current employment need to be in the package. In addition, the last two years? tax returns need to be brought up, and an estimate of the value of the property needs to be included. Lastly, a written explanation needs to be prepared of the current situation, offering a plan or suggestion on bringing the loan to a current status.
