I’m Falling Behind In My Bills. How Can I Avoid A Late Mortgage Payment?
A late mortgage payment can have a huge impact on your credit score and your finances. Ignoring the problem (and the payment reminders) can make it worse, and if you don’t figure out a plan, your debt will accumulate, and you could even lose your home. That’s why I’s important to know how to avoid a late mortgage payment, and our tips can help you with that.
5 Tips For How To Avoid A Late Mortgage Payment
1. Talk To Your Lender As Soon As Possible
Don’t wait for a late mortgage payment to arrange a meeting with your lender. Explain your financial situation and ask what kind of mortgage assistance you can qualify for.
Don’t be ashamed to ask for help. Many people are in exactly the same position, so the banks actually have these programs in place. Plus, the earlier you act on a late mortgage payment, the more options are available to you. Once it hits an astronomical amount, they may have no other choice except foreclosure or declaration of bankruptcy.
2. Prepare For The Meeting
To facilitate your request, go to the meeting with the following information and documents.
- Your current income, and any estimated future income if you believe that your situation may change.
- Your current expenses
- A copy of your latest mortgage statement
- Documents that show income or assets, such as a bank statement and pay stub
- A hardship letter (a document explaining what affected your financial situation)
Hardship Letter Template
You can find many hardship letter templates on the Internet. The important thing is that you don’t make it sound like a sob story. Instead, you’re explaining the circumstances and proposing to change the mortgage terms. Here’s one of the examples for your convenience:
“When I was first approved for the house loan, my annual gross salary was $ _____ / month, and my mortgage payment was $_____ / month. However, (DESCRIBE CAUSE OF FINANCIAL PROBLEM), my income was lowered to $ ____ / month. With the current loan terms, my mortgage payment comprises __% of my monthly income. I would like to honor my obligations, but in my current situation, I can only afford $___ per month, which would be __% of my monthly income. I hope you can consider this proposal or recommend other possible payment options.
3. Ask For Mortgage Forbearance
Mortgage forbearance either temporarily suspends payments or reduces it for a specific period of time. You and your lender will have to talk about how long that will be, based on your financial situation.
Keep in mind that interest on your mortgage will keep accumulating on your balance. But this is still a better option than a late mortgage payment, which will automatically affect your credit score or even end up as foreclosure.
It’s also important to understand your repayment terms, and how the bank expects you to make up for missed payments once the forebearance lifts. Will you be paying more each month, or will you pay a lump sum?
If you’re not sure you can manage those terms, and fear that you will end up with another late mortgage payment down the road, negotiate for a loan modification instead.
4. Request For Loan Modification
If you feel that your financial situation will not change soon, and you will need new loan terms to avoid late mortgage payment, this is the most realistic option for you. You and your lender will change the mortgage terms, either by adjusting the interest rate or the duration of the loan.
Some people will ask for a loan modification right away, while others will first try the route of forbearance. However, most banks will only offer this option as a last resort when your late mortgage payment has ballooned, and you are facing imminent default.
5. Get An Installment Loan Online
One of the fastest ways to raise money for a late mortgage payment is through an installment loan online. Some emergency loans require you to pay off the full amount. This can be very difficult for people who are already struggling to pay bills. An installment loan allows smaller monthly payments, so you can plan your budget accordingly.
Where Can I Get An Installment Loan Online?
Missouri Title Loans, Inc. offers installment loans up to $1,500. You can start your application right now – without leaving your chair! Just fill up our installment loan online inquiry form. Your information will be kept confidential and will only be used to contact you.
One of our loan representatives will call you to explain how the loans work and answer any questions you may have. If you’re interested in pursuing the loan, he or she can help you get started with the application process.
When you’re ready, go to one of our branches and bring a driver’s license or state issued ID, a checking account statement that’s in your name, and proof of income (such as your most recent pay stub). A representative will review the documents and determine the loan amount you qualify for. If you get approved, you will get the money the same day.
Get The Easiest, Fastest Installment Loan Online!
Missouri Title Loans, Inc. makes it so easy to apply for an installment loan. Instead of waiting forever to talk to a customer service representative, we call you to personally answer your questions. And since we started the process online, the actual processing at the branch can be completed in as little as 30 minutes.
Fill out your installment loan online form and get the money you need for a late mortgage payment or any financial emergency.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.