Can Your Credit Be Hurt By A Missed Or Late Mortgage Payment?

real estate and credit score

If you have recently purchased a new home in the Dallas or Flower Mound area or have lived in your home for many years, you may be curious just how (or if) missing a mortgage payment can affect your credit. As trusted real estate agents in the North Texas area, we realize that there are times when homeowners have to decide which obligations will be met first, and you wonder, “Can your credit be hurt by a missed or late mortgage payment?” If you miss a single mortgage payment, will it affect your credit? Depending on how long it is before you do make the payment, it definitely can affect your credit.

Generally speaking, your credit rating can be affected if your payment is more than 30 days late. Mortgages are typically very large loans, and the penalties for late payments are usually much stiffer than those for a late credit card payment. The terms in your mortgage agreement will outline exactly what you can expect, but be ready for the late payment to show up on your credit report, as your lender will likely report the late payment (or even non-payment) to credit bureaus. Making your mortgage payment late can prevent you from qualifying for a mortgage loan in the future, and typically remains on your report for up to seven years.

Considering handing the keys to your home back to the lender?

Before you do, realize that missing a payment altogether or being late on your mortgage payment will not have as great an impact as walking away from your mortgage, which ultimately ends in foreclosure and will impact your credit report for seven years. While you don’t want to miss a payment if there is any way at all to prevent it, it is still preferable over a short sale or foreclosure.

There may be other solutions to your financial dilemma. Regardless of the situation you are in, simply walking away from your home is the last thing you should do – and it could literally ruin your credit for years. Discuss the possibility of refinancing or other options with your lender, or check into government programs which may be available to help you pay your mortgage payments while determining whether walking away truly is the only way to go. It is critical to be thoroughly informed of all of your options before you make a drastic decision that could dramatically change the course of your life!

At Team Nelson, our Flower Mound real estate agents have plenty of tips for homeowners, or those looking to buy or sell a home in the North Texas areas of Frisco, Denton, Highland Village, and other nearby communities. Give us a call today!

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