How a Missed Mortgage Payment Can Affect Your Credit
When anyone experiences financial problems they may find themselves in a situation where they have to choose which bills to pay and when. This often leads many homeowners curious as to how missing one mortgage payment can affect their credit. Dean Graziosi states that missing a mortgage payment can and does impact your credit in a negative manner. The damage is often determined by when you are finally able to make your payment.
If your mortgage payment passes 30 days past due, you can expect that your credit will be affected. Mortgage balances are treated differently than credit card debt primarily because the balance is so big. This means that missing one mortgage payment will likely result in you facing greater penalties. The terms regarding how a missed mortgage payment is treated by lender can often be found in the terms of your mortgage contract. In the majority of cases, the lender will notify the credit reporting agencies of your delinquency and will likely show up on your credit report. Once a report is posted on your credit it can take up to seven years for it to disappear and can cause problems if you are trying to qualify for new lines of credit or a new mortgage.
It is often expected that a missed or late mortgage payment will affect your credit, but many homeowners struggle with the burden of catching up on late payments or choosing to walk away from their mortgage altogether. If a homeowner chooses to simply walk away from their mortgage they should know that they will likely experience a higher level of damage to their credit report. Having a foreclosure or short sale posted to your credit report is something that can haunt you for years to come. If you are behind on mortgage payments or having difficulty making a payment, Dean Graziosi recommends that you contact your lender immediately. In some cases lenders may give you more time to make your payment which is better than walking losing your home.
Circumstances vary from homeowner to homeowner, but no matter how difficult it may currently be to make your payment, you should understand that walking away from your mortgage should be your last option. You may want to ask your lender if you can refinance your loan and any other options they may have available. There are also a number of government programs that can help you remain in your home while you make a final decision on whether or not you should walk away from the loan. It is highly recommended that you make an informed decision. Deciding something on the spur of the moment may lead to regret and a poor credit history later.