Another payment you really need to make on time is your mortgage or rent payment. Going into default on these can not only lose you your home, it can downgrade your credit rating so badly that finding a new place to live will be a major challenge.
One problem with mortgages is that often your mortgage holder is not a local institution. Mortgages are now routinely bundled and sold, then sometimes sold and sold again, with each seller taking a bit of profit. (Many experts are saying this is part of the reason for the economic mess we're now in.) A mortgage held by your friendly neighborhood bank is the exception, not the norm. I'm fortunate enough to have my lender, the original issuer, less than 20 miles away, and on more than one occassion, I've made that 40 mile round trip in order to get my payment in on time.
Why? What happens if you're late? First, if you don't already know, find out if you have a grace period, and now long it is. (But don't take those extra few days as a given. Some lenders are shrinking the amount of leeway they give homeowners.) If you don't get your payment in before the end of the grace period at the latest, you're now a payment behind, and many lenders will hit you with a late fee.This can happen as quickly as fifteen days past the due date.
This can be the beginning of a downward spiral. Such fees may make it even more difficult to bring your payments current. Miss a few more payments and, according to the the Department of Housing and Urban Development, your lender can begin to assess you its attorney fees. You heard that right; you may be expected to pay the legal fees incurred by the lender in trying to force you to bring your payments current.
You don't want to get that position. If you're struggling, do every thing you can to stay current. If you miss a payment, pay it and any late fees as quickly as possible. If you can't, contact your lender and try to work something out. HUD also has counselors who may be able to help you.
Renters, don't count on being able to sweet-talk your landlord into letting you pay late. With credit as tight as it is, few landlords will do this, and a single late payment may start you on the road to eviction. If you can't make your payments, don't ignore the problem. Start looking for something you can afford. Skipping payments, or even worse, being evicted, will seriously damage your credit rating and make it next to impossible to rent a new place.
Some readers may accuse me of being negative here. Well, here in rural Texas, we have snakes. Rattlesnakes, copperheads, cottonmouths, deadly all. Which is why, when I go walking through tall grass or weeds, I wear high boots and watch where I'm walking. And I'm careful lifting up rocks or anything else that's been lying on the ground awhile. Because I know there are snakes out there, because I know where they're likely to be, I can walk my land and do my outside work in relative safety. Knowing what might get you in to trouble, and how to avoid such situations, isn't negative, it's sensible....and good sense is what we all need more of now.
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