One of the first phone calls we ever received was from a woman in Chula Vista. She was a single mother to two boys and worked down at Hilltop Middle School in administration. She told us she was struggling to make ends meet, bills were continuing to stack up, and she didn’t know if she could pay another mortgage payment on her home. After speaking for a little while, it became clear that selling her current home so she could downsize was her best bet if she wanted to avoid foreclosure. We made her a cash offer on her house, which she accepted, and she moved her family into an apartment. Now she’s living not far from the school – and close enough to Otay Valley Park for weekend walks – and she no longer stays awake at night stressing about losing her home or being forced into bankruptcy.
That was five years ago and we still get calls from people like her all the time. There are tons of reasons why people find themselves unable to pay the mortgage on their home. Even folks who are gainfully employed and have never missed a payment in their lives sometimes find that they just can’t get ahead when they’re facing a mountain of bills in a shaky economy. And it’s not at all uncommon. A recent study showed that more than 40 million American families can’t afford their homes, which is why homeownership has declined across all age groups by almost 10% since 2005.
What to Expect If You Can’t Pay
If the story above sounds familiar and you’re struggling to pay the mortgage every month, you’re probably wondering what comes next. Here’s what you can expect if you miss a payment:
1. Missed payment – Let’s assume you just missed your first payment. If your lender is like most, they expect your money on the first of the month, but you might have a grace period that lasts to the 15th. Usually, you’re okay if can get the payment in by this date, but you will probably owe a late fee.
2. Credit score hit – If you’re more than a month late with your payment, your lender will probably report you to the credit bureaus. This is when your credit score takes a hit. FICO released a chart back in 2011 to illustrate how much missing a single mortgage payment will ding your credit, and it can be as much as 100 points.
3. The breach letter – Once you’re somewhere between 45 and 60 days late, you’ll receive a Demand or Breach Letter letting you know that you’re in default. It will tell you very clearly that you will be foreclosed upon if you don’t pay up.
4. Day 60 – 60 days in, you should consider yourself warned. You’ll probably take another hit to your credit score and you’ll get another letter with the total you now owe. Not only will the total include the past monthly mortgage payments, it will also include any fees and penalties you’ve racked up. The actual percentage of the late fee will be determined by the terms in your loan contract, but typically a late charge is only applied to the principal and interest.
5. Day 90/Foreclosure – This is when the actual foreclosure process begins. As little as three months after default, an auction date can be set. At the auction, the home is either sold to the highest bidder or taken over by the bank. If you haven’t voluntarily left the property by now, the sheriff’s office will come by with an eviction notice to get you out immediately.
Aside from leaving you potentially homeless, the fallout from a foreclosure is huge. It will remain on your credit for seven years and can affect it by 200 – 300 points. You will also have problems borrowing money again from a bank, and with new reports suggesting that up to 60% of employers are now doing credit checks on prospective employees, it can actually keep you from getting a job in the future.
Here’s What You Can Do About It
Sell Your House Direct is here to help people in Chula Vista (and beyond) who can’t afford their mortgage anymore, for any reason. We know how tough it is to make monthly mortgage payments in the current economic climate. With Chula Vista currently facing higher unemployment rates than San Diego County as a whole – and a higher rate than the country as a whole – it’s no surprise that a lot of people are struggling.
That’s why our business is geared around the principle of buying your house in as-in condition in as little as seven days. You won’t have to make any repairs, talk to any agents, or have any open houses. Oh, and did I mention we pay cash? We promise to give you a fair cash offer so you can get out of the situation you’re in and move on with a fresh start. If every month is a struggle, it’s just a matter of time before you miss a payment. Contact us so we can help you stay on your feet.Views: 8