The Effects of a Missed Mortgage Payment (And How To Avoid It!)
Experiencing a missed mortgage payment is difficult, especially when you've neglected to pay due to an unforeseen medical problem or job loss. It can cause a domino effect of terrible financial situations. But luckily, there are ways to avoid this tricky circumstance.
You'll find details of the domino effect and how to avoid this cycle below.
What Happens After A Missed Mortgage Payment
Generally speaking, when you don't pay your mortgage, your lender reports it to the three top credit bureaus. When they receive this information, the credit bureaus will lower your credit score, making it harder for you to borrow in the future.
On top of that, your mortgage lender will add a late fee to the payment you didn't make. Typically, they aren't added until after a grace period, which is usually between seven and 15 days after the payment date.
Thankfully, failing to make a single mortgage payment won't trigger foreclosure. For foreclosure to occur, you usually have to fall behind for at least two months and fail to discuss your situation with your mortgage lender.
How To Avoid A Missed Mortgage Payment
Now you know what happens after a missed payment, you're probably looking at ways to avoid it. Luckily, Louisiana residents like you have many ways to get help paying mortgage.
Below you'll find the top five methods that'll help you avoid late mortgage payments:
1. Use The Louisiana Homeowner Assistance Fund
The Louisiana Homeowner Assistance Fund program is funded by the federal government and is offered to homeowners who were impacted by the Covid-19 pandemic. If you're at risk of foreclosure or have missed payment, you can probably gain assistance from this method.
To get access to this funding, you need to meet the legibility requirements, which are as follows:
- You must own and live in a home in Louisiana.
- The property must be your primary residence.
- You must meet the minimum income qualifications. Low- and moderate-income households are generally accepted.
- You must have experienced monetary hardship because of the Covid-19 pandemic.
Depending on your situation, you can get up to $25,000 toward your mortgage payments.
2. Switch To An Interest-Only Mortgage
While an interest-only mortgage isn't necessarily a great idea when looking for long-term help paying mortgage, it can be useful if you're struggling with short-term money problems.
This type of mortgage involves paying off the interest portion only. If you've paid your mortgage for a long time, it will reduce your monthly payments dramatically, making them easier to afford. However, it might not make such a big difference if you've only held your mortgage for a short period.
Either way, you should revert to your standard mortgage as soon as possible.
3. Try A Reverse Mortgage
If you are at least 62 years of age, you can use a reverse mortgage to turn part of your home's equity into cash.
You don't have to sell your abode or take on extra monthly bills. It simply allows you to stop paying your mortgage while you live in your home. You only repay if you sell your home or permanently leave it.
There are three types of reverse mortgages to pick from:
- Proprietary reverse mortgages
- Federally insured reverse mortgages
- Single Purpose reverse mortgages
Speak to your lender to find out which one is right for you.
4. Start A Side Hustle
If you don't feel like playing around with your mortgage or you don't qualify for the HAF program, you can always start a side hustle to bring in some extra cash. Hopefully, you'll earn enough to avoid missed mortgage payments.
There are lots of side hustles you could start, depending on your skills and availability. For example, freelance proofreading, copywriting, and transcribing can pay well, provided you have the relevant experience, can type quickly, and have time to find clients. Otherwise, try online surveys and user site testing to earn extra money in your free time.
5. Get A Loan
All you need to do is provide your state-issued photo identification (e.g., driver's license, passport, military dependent ID card, or military ID card), lien-free vehicle title, and your vehicle for inspection. Once you've gathered your documents, complete the online form found on this site, and our loan associate will guide you through the rest!
Submit Your Title Loan Inquiry Right Now!
Fill out our online inquiry form to get the cash you need to avoid a missed payment easily. You don't need a perfect credit score; we accept people from all economic environments. So, get started today!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.