The first thing many homeowners want to do after missing a mortgage payment is a refinance for a quick and painless fix. Rather than paying one or two smaller bills late, many homeowners choose to pay their smaller bills on time and postpone the mortgage payment.
This is actually the opposite of how homeowners should perceive the importance of their payments. Your home may be your greatest financial asset, but it can also be your largest liability. You're almost always better off missing a payment on another bill than delaying a mortgage payment. It can cost tens of thousands of dollars over the years, which is a much more serious loss than missing a credit card or utility bill payment.
Any time you miss a mortgage payment, your mortgage credit quality takes a serious hit – a loss that is reflected in your credit score for up to seven years. Choosing to pay other debts ahead of your mortgage payment could have a variety of adverse effects, including disqualifying you from obtaining a future loan altogether.
What can you do to prevent this? Sign up for automatic mortgage payments, ahead of the due dates for your other bills, so that you won't be tempted to pay anything else when the pressure of collection calls begins. I also recommend an escrow account for your property taxes. This valuable service is at no additional cost to you and gives you the advantage of having the lender manage timely payments of your taxes and homeowner's insurance. Another important piece of advice is to continually review your budget in an effort to manage your finances.
The best recommendation I can give you when you are anticipating an overdue mortgage payment is to contact your lender and let them know. This is one of the many advantages you receive when you have a mortgage with a local hometown lender. We don't want you to lose your home, and quite often we can assist you with budgeting and loan workouts. Your lender may suggest alternatives that you may not be aware of.
Unexpected events happen and we aren't always able to plan for them. Please consider seeking outside help if you have any doubts about making next month's payment.
Protect your financial future by visiting your local North Country Savings Bank today. Walk into any one of our branch offices and talk face-to-face with someone who cares.