Kat’s Money Corner
Catching up on your mortgage
Week of July 28
It’s estimated that only about 30% of Americans own their homes outright—for most of us, mortgages are what make our cozy houses possible. And while it’s a great feeling, it can also be a major stressor for many people, because it only takes one missed mortgage payment to be hundreds, or maybe even thousands, of dollars behind. If you find yourself in that situation, here are a few ideas to get back on track.
Call your lender and address the elephant in the room. Explain why you’re late and open a conversation about your mortgage. It will not only help your reputation as a borrower, but there is a chance your lender will be understanding and can work something out with you.
Find extra income.
If you could make extra money magically appear, you would have by now, right? Well, in this case it’s more about seeking opportunities you may not have previously considered. Do you have a tax refund around the corner? A savings account you’ve earmarked for a special occasion? It may be better to allocate that money to catching up on your mortgage first before you focus on anything else.
Understand the terms of your loan.
One late payment may be understood but two could possibly render your borrowing contract null and void. So while paying back a missed payment is important, it may be more pressing to get and stay back on track so that you don’t miss multiple payments. Also make sure you clearly understand your late fees and possible interest on those fees.
If there doesn’t seem to be any end in sight to the financial strain that caused your missed payment, consider what you can do to change it. Applying to refinance your loan for a lower monthly payment or ask your lender about forbearance.
Whatever the reason you’re behind on your mortgage payments, there’s always a solution. Life happens, so just focus on having the right tools to figure out what went wrong and fix it instead of beating yourself up.
Kat’s Money Corner is posted on Dollars & Sense every Tuesday. Kat Hnatyshyn, when not blogging or caring for her little ones, is a manager with CommunityAmerica Credit Union. For more financial chatter, visit http://communityamerica.com.