How To Determine When To Stop Making Your Mortgage Payment

By Author: Nick Adama
Total Articles: 197
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All the time homeowners call us asking whether they should continue making mortgage payments. People can't decide if it's worth it to continue paying the lender, when they know it's just a matter of time until they will begin missing payments.

As times get tough it's important to decide which bills are important. It's very hard to continue making payments on a home that you know you're going to lose. My personal line of reasoning is to never advise someone to pay or not pay their loan. Instead I try to inform the clients of the different results that come from making or not making a mortgage payment.

In most cases, when you are trying to negotiate with a lender, it's better to be late on mortgage payments. But it's not an absolute requirement. In most cases, mortgage companies don't want to give borrowers a better deal when they know making the existing house payment is possible. But if you can prove the existing payment is un-affordable and that a lower payment would be affordable, you can get a modification approved. In fact, some government bailout plans require you to be current on your mortgage. Still, other ...
... government plans require you to be behind on payments, so you really need to research what modification plans you are likely to qualify for.

When you are capable of keeping your loan payment up to date, while maintaining your basic family necessities, then it's usually a good idea continue making your payments. By keeping your payments up to date, you will avoid damage to your credit report and you don't have to worry about foreclosure or other penalties and fees. If you don't make your payments, your credit report score will fall rapidly. But you will be able to hang on to your cash, which you may need to help avoid foreclosure. Another disadvantage of not making your payment is all the fees that will be charged when you get behind. This may not end up being a big deal if you are able to eliminate the arrears or get a short sale, but if you end up being required to pay the total amount owed to keep your home, these fees can really add up.

In the end, it's up to you to decide if making your mortgage payments is even possible. But if I were in foreclosure and I could afford my payments, (even if I had to make sacrifices elsewhere) I would try to keep making them. But, I would not deplete my savings or retirement account to continue paying an un-affordable mortgage.

I hope this information is helpful and as always, feel free to ask for help anytime!
Nick publishes articles on the ForeclosureFish website to provide foreclosure help and news to property owners in need of assistance. The site examines various options to save a home, including deed in lieu, filing bankruptcy, short sales, defending foreclosure in court, and more. Visit the site for an e-book explaining the basics of foreclosure and how to stop the process: http://www.foreclosurefish.com/