Missed Mortgage Payments and Your Credit - How Are You Affected?
A good credit score is important for more reasons than just obtaining new credit. These days, it can factor into everything from landing a new job to getting the best deal on your insurance policies. For so many reasons you may not have even considered, it's more important than ever to avoid late payments on your mortgage!
A 100 Point Drop from One Missed Payment?
It’s true. A single 30-day-late mortgage payment can cause your score to drop by as much as a hundred points. Credit scoring algorithms vary based on many factors, and in some instances, the damage may be even greater and last for years.
The Costs Accumulate
At the time, a single missed payment will cost you only a late fee, but the expense really adds up on your next loan or missed opportunity. Low credit scores typically mean a higher rate and cost. Higher rates can mean hundreds of thousands of dollars of extra expense over the life of a loan.
Missed Payments are Usually Unplanned
Usually, events beyond our control lead to late payments, such as an accident, illness, job loss or family issue. At other times, carelessness or a hectic life may result in a forgotten payment. There are many possible reasons why you may have forgotten or missed a payment. While life does happen, it is still your duty to ensure your payments are made on time. So, maybe it's time to make a plan for those unexpected times.
What Can You Do?
Plan for the unexpected. Maintain an emergency cash reserve account equal to at least 3 months of living expenses or more. Another option for avoiding late or missed payments is to automate. If you're prone to forgetting or don't have a scheduled time to sit down and pay bills, set up auto payments through your checking account or put a perpetual reminder on your calendar.
A Drop Takes Time to Recover From
Little other than time will decrease the negative impact of a late payment, so prevention is the one sure remedy. If you don't already have a good system in place to assure timely payments and are not sure what's best, reach out anytime. We'll be happy to help set up a plan that's right for you.
Mortgage Headquarters of Missouri, Inc
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
NMLS # 1229111
A 100 Point Drop from One Missed Payment?
It’s true. A single 30-day-late mortgage payment can cause your score to drop by as much as a hundred points. Credit scoring algorithms vary based on many factors, and in some instances, the damage may be even greater and last for years.
The Costs Accumulate
At the time, a single missed payment will cost you only a late fee, but the expense really adds up on your next loan or missed opportunity. Low credit scores typically mean a higher rate and cost. Higher rates can mean hundreds of thousands of dollars of extra expense over the life of a loan.
Missed Payments are Usually Unplanned
Usually, events beyond our control lead to late payments, such as an accident, illness, job loss or family issue. At other times, carelessness or a hectic life may result in a forgotten payment. There are many possible reasons why you may have forgotten or missed a payment. While life does happen, it is still your duty to ensure your payments are made on time. So, maybe it's time to make a plan for those unexpected times.
What Can You Do?
Plan for the unexpected. Maintain an emergency cash reserve account equal to at least 3 months of living expenses or more. Another option for avoiding late or missed payments is to automate. If you're prone to forgetting or don't have a scheduled time to sit down and pay bills, set up auto payments through your checking account or put a perpetual reminder on your calendar.
A Drop Takes Time to Recover From
Little other than time will decrease the negative impact of a late payment, so prevention is the one sure remedy. If you don't already have a good system in place to assure timely payments and are not sure what's best, reach out anytime. We'll be happy to help set up a plan that's right for you.
Now that you know how missing payments can have a negative affect on your credit score, you can begin making a plan to prevent a huge drop in your credit score in the future! If you're in need of a mortgage for a new home, or have any other questions pertaining to mortgage lending, trust in the mortgage professionals at MHQ - Mortgage HeadQuarters to have your best interest in mind. We can help you choose a mortgage program that's right for you and your specific needs and budget!
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
NMLS # 1229111
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