CoreLogic’s recent Loan Performance Insights Report showed an improvement in the overall mortgage delinquency rate.
According to the report, the national mortgage delinquency rate was down to 5 percent in September. That’s 0.2 percent lower compared to last year’s September report. Other than that, this year’s delinquency rates reached its lowest after more than a decade.
For the mortgage industry, these reports show great improvement among mortgage borrowers. However, there’s still more work to do.
As much as possible, borrowers should avoid mortgage delinquency and end up suffering from its consequences.
What is mortgage delinquency?
By definition, mortgage delinquency happens when a borrower fails to make his payments on time.
Which is why it’s always smart for a borrower to be meet his financial responsibilities in order to avoid mortgage delinquency.
When done repeatedly, this could probably lead to foreclosure. Besides that, missing out on your mortgage payments can hurt your current credit standing.
On the bright side, there are good habits that you can foster in order to avoid mortgage delinquency. Here are ways that can help.
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Be transparent with your lender
If you are certain that you can’t pay your next mortgage payment, inform your lender as soon as possible.
Being upfront about the reasons why you can’t make your payments helps your lender understand your situation. It also allows them to come up with solutions that might benefit you.
That way, you and your lender will get to a mutual agreement and you can move forward to work on how you will both deal with the situation.
Work with your lender
After having an honest discussion with your lender, you can both come up with a solution.
Your lender can help you resolve the problem and you should be open to working with them.
After all, resolving your situation is for your own good.
Perhaps the most immediate outcome of your delinquency will be by charging a late fee. While this may cost you a lot, lenders put up the fee to serve as a deterrent from these delinquencies.
You and your lender may also work on allowing a window for you to make your payments. This usually happens when they prove that your financial strife will only be temporary.
A loan modification may also be one of your possible solutions to avoid mortgage delinquency. This process will restructure your mortgage so that you can pay up mortgage easily.
With all these in mind, your goal should be for you get out of your delinquency as soon as possible so that you won’t end up having the worst case scenario: foreclosure.
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Good financial management habit helps
Fostering better habits to deal and manage your finances is still one of the best ways to help avoid mortgage delinquency.
Look for ways for you to regain control over your expenses and work on efficiently managing your savings. Having an emergency reserve is also a smart move when it comes to financial management.
This way, you will have something to turn to whenever you encounter financial problems especially when it has to do with your mortgage.
In the end, you have to manage your mortgage payments well. It’s also important to not take it lightly.
Not only will it put your home in danger of foreclosure, it can also affect your creditworthiness.
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