When finances are stretched too far, you might find yourself having to choose between paying your mortgage and keeping your electricity on. Prioritizing bill payments is never easy, so it’s important to choose carefully. One missed mortgage payment can adversely affect your credit, especially more than 30 days pass before the late payment is made.
31+ days past due
When your mortgage payment is more than 30 days late, your credit report can take a hit. Since mortgages are substantial loans, late mortgage payments carry a stiffer penalty than you might see with other late loan payments. Depending on the terms of your mortgage agreement, when a payment is late or missed altogether the credit bureaus will be notified by you lenders the delinquent payment can appear on your credit report. Delinquent payments remain on your credit report for up to seven years and can interfere with your ability to qualify for a future mortgage loan.
Walking away from a mortgage.
While paying your mortgage late can impact your credit, when the burden of keeping up with monthly mortgage becomes overwhelming, the idea of walking away from the mortgage altogether can seem like the only option available. But before you take such a dramatic step, you need to know that a foreclosure or short sale will damage your credit fare more severely than missing or being late on a payment. A foreclosure will remain on your credit report for seven years after the filing date.
What are your options?
Every situation is unique, but no matter how difficult it seems to catch up and keep up with your mortgage payments, walking away is almost never the solution. Government are available to help homeowners stay afloat while contemplating the decision to walk away from their mortgage. If you can’t keep up with your mortgage payments, are facing foreclosure or have even considered walking away from your mortgage, get advice from a real estate attorney or respected financial adviser, and maybe you’ll discover an option you can live with and manage to keep your credit score intact while you’re at it.