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 Damaged Credit? We can help you refinance and save!

Your home is the collateral for your mortgage loan. If you default, the home is no longer yours. If you have mortgage loan insurance, the insurer will pay the bank the remainder of the loan, however, now the home belongs to the insurer. It’s all a matter of who will be foreclosing on you if you default – your insurer or your bank.

Mortgage payments should always be made in full and on time. It should take priority over other bills if you can’t pay any of them because your home is your shelter. If you lose that shelter, where will you go? If you default on anything, your credit history will suffer; you have become high risk to all lenders overnight. You will have trouble obtaining new credit. Most of your lenders (credit cards, other banks for other loans) will generally monitor your credit activity pretty frequently and once they find out you’ve become high risk, you can look forward to interest rate increases or even worse – frozen accounts.

Your lenders do have the right to take this type of action toward you if the situation presents itself. If you can’t make the full payment, pay what you can, that is still better than missing a whole payment. At least then, the lender knows you’re trying to repay the loan. There will be more leeway for discussion and negotiation if you at least pay some of it. They may give you another month or two before they foreclose or if you can come up with the next payment in full then they will not foreclose. If you default on your loan, all those previous payments are gone. There is no way you’re getting any of that back.

If you cannot pay your bills, mortgage refinancing may be the answer. Normally, people refinance when interest rates are low, but if you can’t pay your current bills, refinancing might be your only choice. You can opt to refinance before you default (if you defaulted already – this will be difficult to do because you’ve tagged yourself as high risk). You can choose a plan that has lower monthly payments that you can make. Another option is a home equity loan – this could mean a second mortgage or an addition

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