What if I can’t pay my mortgage?
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default, foreclosure March 24th, 2008Also: Is a ’secured’ card a good way to repair damaged credit?
With millions of Americans at risk of default and foreclosure on their mortgages, Simon in Florida has a question that’s on a lot of readers’ minds. What happens if you can only make a partial mortgage payment?
What will happen if I only make a portion (half) of my monthly payment to the bank during this time of economic crisis? Will the bank foreclose my home? After all, I’m paying not the full amount, but it’s the only amount that I can send.
— Simon, Cape Coral, Fla.
Most lenders won’t take partial payment — so you’ll likely get the check back in the mail.
But you don’t go straight to foreclosure by missing one payment. Foreclosure happens in stages: The first is when the bank decides you’ve officially defaulted on your loan. That usually means you’ve missed more than one payment.
Even if you’ve gotten a notice of default, there are steps you can take to avoid foreclosure. One of the most important — and difficult — decisions is whether you think you can handle the mortgage over the long term with help from the lender. In some cases, that may not be possible and the best solution is to sell your home before the foreclosure process gets started. That way you avoid having the foreclosure on your record and damaging your ability to get credit in the future.
Tags: default, foreclosure
