24
Jul
By support
Home Mortgage Tips

Can One Missed Mortgage Payment Affect Your Credit Rating? Yes! Here’s What to Do if You Miss One

Can One Missed Mortgage Payment Affect Your Credit Rating? Yes! Here's What to Do if You Miss OneMost people don’t know whether or not a single missed mortgage payment can have serious consequences for their credit score.

The good news is that there are things that can be done to mitigate the damage and help anyone who has missed a payment repair their credit. What are some options to help homeowners get back in the good graces of their creditors?

Own Up To The Mistake

The best thing to do is to admit that the payment was missed and immediately make amends for it. For the most part, mortgage lenders are sympathetic to the fact that people miss payments for reasons that may be beyond their control.

By calling the lender as soon as it appears that a payment may be late or not forthcoming at all, it is easier to make arrangements to roll that payment back into the mortgage or take other steps to decrease the odds of a negative remark being made on a credit report.

Don’t Let A Single Missed Payment Turn Into Multiple Missed Payments

While a single missed payment can hurt a credit score, it is important to not compound the mistake by missing more payments. In some cases, someone may decide to make up for the late payment before making any further payments.

However, that only makes the mistake worse because a borrower will be considered late on all subsequent payments. It is better to make the most current payment on time and make the late payment the secondary priority.

Hire A Third-Party If Necessary To Negotiate A Loan Modification

It is important to not let emotion get in the way of negotiating a modification to a mortgage. When a borrower hires a credit counselor or a bankruptcy attorney to talk his or her creditors, the negotiations can stay professional and on topic.

In most cases, a lender will be willing to make modifications for those who need them because it is better to get the money from the borrower willingly instead of having to go through a foreclosure proceeding.

While a missed mortgage payment can be bad news for a credit score, it is possible to make amends for the missed payment while minimizing long-term damage to a borrower’s credit score. By owning the mistake, staying current on all future payments and working with a third-party, it may be possible for a lender to forget that the missed payment ever happened.

22
Jul
By support
Home Mortgage Tips

Is Now the Time to Consider a 15-Year Mortgage? Five Reasons to Give the 15Y Another Look

Is Now the Time to Consider a 15-Year Mortgage? Five Reasons to Give the 15Y Another LookA 15-year fixed mortgage is, as its name suggests, a mortgage that’s paid off after 15 years. Since it amortizes fully, after that amount of time you won’t have to pay anything else. This type of mortgage has a lot of benefits, and below we’ll share just a few of them.

1) No Need For Payments After Retirement

Here it highly depends on when in life you choose to take on the mortgage. However, most people decide to take on a mortgage at around 30 years of age.

If this is the case for you, then it means you’ll be 45 years old when your mortgage will be fully paid. There will be no need to worry about having to use Social Security or pension checks to pay it off.

Another consideration is the fact that the older you are, the more your health costs will go up. Having costs like that pile up while having to make mortgage payments can be a huge problem. For that reason, not having to pay off your mortgage after retirement is a tremendous bonus.

2) Your Home Will Be Yours Sooner

You might think your house is yours the minute you step into it. However, in reality, it’s only yours after you have fully paid your mortgage off. Until then, it can be repossessed if you fail to make payments.

With a 15-year mortgage, your home will become yours in the blink of an eye. Then, you’ll have plenty of time to enjoy other things in life, knowing you already own your home.

3) You’ll Pay Less Interest

If you were to pick, say, a 30-year mortgage, there will be twice as many years in which interest will add up. This will more than double the amount you end up having to pay, as mortgage interest compounds over time.

As such, getting a 15-year mortgage will not only reduce the time you’ll pay it off; it will also reduce the amount you pay back. Saving both time and money is an amazing deal.

4) Get Lower Rates

On most 15-year mortgages, the amount you have to pay in terms of rates is usually lower than for 30-year ones. As such, you’ll be saving money in two ways. First, you’ll save by reducing the time, then, by reducing the actual rate.

5) Learn To Push Yourself

Some people fear getting a 15-year mortgage. The reason is that they think the payments will be too expensive. They think that getting a 30-year mortgage is likely a better idea.

If you can’t afford to make the payments of a 15-year mortgage, you might want to reconsider. However, if you can afford it, but you’re afraid, don’t be. Pushing yourself to achieve something you truly want is a good thing. You’ll become a stronger person, and you’ll have more reason to be proud of your achievement.

A 15-year mortgage has many benefits. The main one is simply that you’ll be able to pay it faster, which means that you won’t worry about it for long. This, in addition to the fact that you’ll be paying less are very convincing factors.

If you’d like to learn more about 15-year mortgage plans, contact your mortgage professional for more information.

17
Jul
By support
Home Mortgage Tips

An Insider’s Guide to Reducing Your Remaining Mortgage Years Through a Smart Refinance

An Insider's Guide to Reducing Your Remaining Mortgage Years Through a Smart RefinanceIs it always the best idea to pay off a mortgage over 30 years? While it may help a homeowner lower his or her monthly payment, it can mean paying more in interest and waiting several more years to build sufficient equity in the home.

The question is…how can a homeowner reduce the amount of time it takes to pay off a mortgage by refinancing his or her loan? A few methods for reducing your mortgage term are explained below.

Refinance From A 30-Year Mortgage To A 15-Year Mortgage

For those who don’t want to wait any longer than necessary to pay off their home loan, it may be possible to refinance to a shorter-term mortgage. Instead of taking 30 years to pay off the loan, a homeowner can opt to pay off the loan in 10 years or 15 years. The shorter the term, the less interest will be paid on the loan.

Get A Lower Interest Rate With A Shorter-Term Mortgage

Another good reason to shorten a mortgage term is because it could lower the loan’s interest rate. Instead of paying 4.5 percent over 30 years, it may be possible to pay 4 percent over 15 years. This gives the mortgage holder the chance to build equity in the home faster as they are paying more of the principal balance with each payment. While a mortgage holder can pay more than the minimum amount on a longer-term mortgage each month, it could still end up costing more overall due to the terms of the loan. Be sure to ask your mortgage professional about your options here.

Stop Paying Mortgage Insurance

Those who are paying mortgage insurance could be paying $200 or more per month for nothing more than the right to protect the lender against default. Homeowners who could qualify for a conventional loan should attempt to refinance to a conventional loan if possible to avoid making this payment. Instead of going toward mortgage insurance, put that money toward the principal balance on the loan. There are, of course, risks involved with this approach so be sure to fully discuss them with a professional.

How Can Someone Refinance A Loan?

Now that you know how to pay off your mortgage faster through a refinance, how can someone go about refinancing a home loan? Fortunately, refinancing is similar to the process of securing the home’s first loan. All a borrower will need to do is find a lender that he or she wants to work with, find an offer that works for that borrower and then close on the deal. Although there may be closing costs associated with the new loan, some lenders may be willing to waive some or all of them on a refinance.

Paying off a mortgage as soon as possible can help a borrower save money while building equity in the home at a faster pace. This gives a homeowner financial strength as well as the flexibility to sell the house in the future without worrying about losing money in the deal. To find out more about refinancing options, talk to a mortgage lender.