Skip a Mortgage Payment? Don't Make This Mistake! Denver, CO
It seems that everyone is refinancing these days. Refinance Rates are low, and people are taking advantage of it.
Along with refinancing, many times a home owner can skip a mortgage payment.
It is important to understand that you don't really skip a mortgage payment when you refinance. The mortgage companies will always get their interest, so what happens when you skip a mortgage payment is that the interest is rolled into the new mortgage. Not a bad option for help with cash flow in your household so you can take care of other bills that month.
However, don't make this critical mistake! Many mortgage loan officers will tell their clients to stop making their payments because they are refinancing. This is horrible advice!
Even though you can skip a mortgage payment when you refinance, it's a horrible idea to just stop making your mortgage payments.
Remember, the mortgage company will still want their interest, so if you stop making your payments leading up to closing, you will risk having a 30 day mortgage late appear on your credit. This occurs when your payment is sent more than 30 days past the due date. Even if you are refinancing, if you make your payment to your current mortgage company more than 30 days late, it will show up on your credit, and potentially derail your refinance.
A mortgage late payment will affect your credit for years, and could cause your credit score to plummet.
So, if you get the advice from your mortgage broker to stop making your payments- bad idea! Keep making your payments until your closing is scheduled and certain, because the worst thing that could happen is for a mortgage late payment to show up on your credit.