Stacey-Ann's Blog

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Keep on Paying Your Mortgage If You Can

There has been a great deal of talk about the new plans to help home-owners in trouble with their mortgage.  It seems unfair to the millions of us who have been paying our mortgages on time every month.  I've heard several people say that they are going to stop paying their mortgage just so they can get their payments reduced too.

This is a short-sighted approach.  If your mortgage is unbearable then you need to speak to your lender.  However, if you are managing your mortgage but want a change on principle, please consider the repercussions.

If you stop paying your mortgage it will have a negative effect on your credit score.  These days credit is even more important than ever.  This will hamper your ability to apply for new credit, buy a car, and in some cases get a job.

The long-term preservation of your credit score is very important.  People undersetimate the impact that a poor credit score can have on you.  Even if you are not currently planning any purchases - the default of a mortgage or even several late or missed payments will negatively impact your score for years.

If you can, keep up with your mortgage, it will leave you in a better place financially in the long run.

If you or someone you know would like information about buying, selling, or renting a home in Prince George's, Montgomery,  Charles, Calvert, Anne Arundel, Howard, and/or Baltimore Counties please contact Dr. Stacey-Ann Baugh of Century 21 New Millennium.

 

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Dr. Stacey-Ann Baugh

Century 21 New Millennium

www.LiveinPGCounty.com

staceyannbaugh@gmail.com

240-481-3565 (C)

202-546-0055 (O)

 

FINALLY!  A DOCTOR WHO MAKES HOUSE-CALLS!

 

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Comment balloon 15 commentsDr. Stacey-Ann Baugh • March 04 2009 07:30AM

Comments

Hi Stacey Ann, I am with you ! I have heard this more than once.   While it is true that lenders have their hands full working on the "bad ones" that is no excuse to be bad! 

Posted by Robert Rauf (HomeBridge Financial Services (NJ)) over 9 years ago

Hi Stacey - Good advice!  People who want to reduce their payments should look into refinancing instead of nonpayment.  Interest rates are lower than they have been in years and people can take advantage of these lower rates.

Posted by Jon Wnoroski, Summit County Realtor (America's 1st Choice RH Realty Co., Inc.) over 9 years ago

Hopefully more and more people will be able to pay theirs too!!!

Posted by Richard Shuman, Real Estate Broker - Orlando Area - Love Referrals (The Only B.S. I Have is from the University of Massachusetts) over 9 years ago

Everyone please listen to Stacy-Ann. If you can afford to pay your mortgage, continue on doing so. It will crush your score if you decide to stop paying.

Posted by David Width Jr. over 9 years ago

Excellent advice.  I have received calls from people asking about modifications only to find out that they have been banking mortgage payments instead of paying the mortgage holder so that they will fall behind on purpose.   

Posted by Rebecca Anne Cole (PNC Mortgage ) over 9 years ago

Hi Stacey-Ann, this is such a good post.  Some people  don't realize that they will "pay" later from a bad credit score.

Posted by Mary Douglas, REALTOR, Red Feather Lakes, Colorado (United Country Ponderosa Realty, Red Feather Lakes, Colorado) over 9 years ago

Robert - I keep hearing this over and over

Jon - Refinancing is a great option but not everybody can these days

Richard - I am hoping that more people will be able to pay

Posted by Dr. Stacey-Ann Baugh, A doctor who makes house calls. (Century 21 New Millennium) over 9 years ago

David - crush is a good way to put it.

Rebecca - how crazy is that decision?

Mary - I see it all the time with renters who had no idea how one small thing on their credit years ago could have such a huge impact on their life

Posted by Dr. Stacey-Ann Baugh, A doctor who makes house calls. (Century 21 New Millennium) over 9 years ago

Stacey-Ann, it's sad to hear about people who seem to be gaming the system, but the banks are sometimes giving them few options.

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 9 years ago

Stacey-Ann, Great advice. There is always a small number of people who try and game the system and make it look bad for everybody. 

I've been showing a number of short sales recently and you would be surprised at the number of Mercedes Benz's in the driveway of short sale situations. Rich

Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) over 9 years ago

well said Stacey-Ann. It is short sighted indeed to stop payment on the chance you will receive aid. 

Posted by Paddy (Patricia) Pizappi, Real Estate Associate Broker Hudson Valley NY (Better Homes and Gardens Rand Realty) over 9 years ago

Stacey-Ann. Lets hope more people heed your advice. I too have heard of people trying to force the hand of the bank. It makes no sense.

Posted by Ellie McIntire, Luxury service in Howard County & Catonsville (Ellicott City Clarksville Howard County Maryland Real Estate) over 9 years ago

Stacey-Ann - Great advice!  If people are able make their payments, they should make them... :)

Posted by Debi Ernst, GRI, e-PRO, Broker/Sales Associate (St. Charles County, Missouri - Prudential Alliance Realtors) over 9 years ago

Patricia - some banks are being very inflexible

Rich - I believe you. 

Paddy - especially if you do that and mess up your credit and still get no help from the bank

Ellie - I agree, its not sensible

Debi - I always advice people to cut back somewhere else, not the mortgage payment if possible

Posted by Dr. Stacey-Ann Baugh, A doctor who makes house calls. (Century 21 New Millennium) over 9 years ago

I have stopped paying the mortgage on purpose. I have cashed out on my 401k. I have bought some gold. I'm keeping some cash in hand. I'm going to live in my house for free for about a year until they come and take it. Granted, my FICO will go down and it will hurt me a lot.

I paid 350 for my house and put 20% down.  Never refinanced. At a point, I had 150000 worth of equity. Now, I'm 100000 in negative equity. The guy who bought my house next to me are paying 1000 less a month and had the gut to ask me why I bought a house that I could afford in 2003? I'm pissed, very.

In addition, a desperate governement is spreading money away. The sirens of socialism are here people and there is every indication that this time around, YOU are better off with your money in your pocket, nowhere else!!!!

Posted by Kunta Kinte over 9 years ago

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