There is so much happening right now around the world, and it’s causing a lot of people to delay their most awaited plans. The country is in freefall, millions of people are unemployed, and we’re in the midst of a pandemic with no end in sight.
You may be one of those individuals who used to stay on track with your bills and other monthly expenses.
Then suddenly, this global pandemic arrives and just caused additional branches of problems. One of which is staying updated with your bills, especially your mortgages fees.
Good thing, though, there are ways we can somehow pay our monthly expenses, and that is with the assistance of a licensed money lender Singapore. People can also go directly to their bank and apply for a loan, but the process may take a while.
Not paying your mortgage is different from not paying your rent, and it has a greater impact on your credit score. If you don’t pay up, that might put your house in trouble. You do, though, have a few choices, ranging from a forbearance deal, which will buy you more time to sort it out, to a deed in place of foreclosure if the condition can’t be salvaged.
Is it Bad to be Late on My Mortgage Fees Payment?
If you miss a mortgage payment, your lender will report the late payment to your credit bureau, which is known as delinquency. Late payments appear on the credit record for a period of seven years. Even missing a single mortgage payment would have a negative impact on your credit score.
The recovery duration from the negative impact is determined by the severity of the delinquency. If you choose to wait to pay your bills and other monthly expenses, your credit score may suffer more from this. Also, the bank may be forced to foreclose your property.
If you’re 120 days or more behind on your payments, the eviction process will begin. This is where the landlord takes ownership of the house and kicks you out. The legislative procedure for this ranges from state to state. The lender’s aim is to sell the property and use the money to pay off your remaining debt.
This may seem to be a good option because you’re no longer liable for the remaining loan debt, but you may be forced to pay the difference if the selling proceeds don’t offset the whole loan balance. This is known as a “deficiency decision” because it allows the lender to take further disciplinary action.
Ways you Can Pay your Mortage Fees.
If you want to retain your house or property, there are a few things to think about that might help you escape foreclosure. Here are some possibilities:
- Take Out a Loan: Borrowing money from a licensed lender can save you a lot of trouble. Of course, there are still some factors to consider when you borrow money, but this tip is one of the fastest, easiest, and reliable solutions for your potential late payments.
- Debt Settlement: A debt settlement arrangement involves the lender deciding to take a lower payment than the entire sum owing on the loan. It will weigh poorly on your financial records if you pay a loan for less than what is owed.
- Loan Modifications: A loan modification program can allow you to lower your monthly payments. Be mindful that loan modifications come in a variety of forms, and not all of them would have the same effect on your credit score. Any loan modification schemes, for example, might simply be debt settlement plans disguised as a loan modification.
- Forbearance: If your financial difficulties are temporary, your lender might be happy to reduce or even delay your mortgage payments before you are able to start making your daily payments.
- Loan Repayment Plans: If you’ve been behind on installments, the loan might be able to help you keep up on a repayment schedule.
- Loan Refinancing: One factor that can help you get through your problems with late payments has a good credit score. You have a good credit score if you’re always updated with your repayments. If your credit score is strong, you will be able to refinance your loan. If your new loan has a high interest rate, refinancing at a lower rate could reduce your payments significantly.
Prevention Tips
Now, if somehow you’ve stumbled upon this article because you want to prevent falling back on your mortgage fees, we’ve listed some prevention tips for you. If your concern is a transient income issue, working a few part-time jobs will help you stay in your home and stop falling behind. Other tips include:
- Go for a House you know you can Afford: If you spread yourself too thin, you might find yourself exhausted by your house payment, particularly if your income changes or an emergency arises that necessitates additional funds. Make sure you can afford a mortgage by crunching the numbers using a mortgage calculator before applying for one.
- Save Money: This tip works for every financial issue. Whatever the occasion or your life status, you should always start saving money as soon as you begin to earn money. This tip will not only help people be able to use their savings to pay their mortgage fees, but it can also save them from other emergency fees like medications, etc.
- Pay Off Your Loans: Paying off credit cards, personal loans, school loans, and other debts ahead of time allows you to save money and make mortgage payments smoother. You wouldn’t want your debts piling up, especially if you don’t have any other financial support.
What’s the Best Solution?
The best choice for you is determined by your own financial condition. For example, if you haven’t paid your mortgage in a few months or have just paid a portion of it, you shouldn’t apply for bankruptcy.
However, renegotiating the terms of your loan or borrowing money from a family member or trustworthy friend can be worthwhile. Many lending institutions recognize that this is a tough time for people because there is a worldwide pandemic, and thousands of Singaporeans have lost their jobs.
Although obtaining a mortgage loan can be daunting if you are unable to repay it, there are still solutions available to assist you in this tough situation.