Playing "Catch Up"? The Impact of Late or Missed Payments


Playing "Catch Up"?
The Impact of Late or Missed Payments


Everyone's familiar with the term "catch up", right?  You've probably heard it used hundreds of times ...


As a kid, you probably used it yourself with friends when you said ... "You go ahead, I'll catch up".


As an adult, it's likely you've said, "I'm playing "catch up" at work" after returning from a long weekend or vacation.  Or upon meeting an old friend, asking them to give you a call so you can "catch up" with each other. 

So "catch up" is typically seen as a good thing ...  

It has a positive connotation.  It denotes affirmative action will be taken or wrongs will be righted.

But there is one place where "catch up" is not viewed as favorably or is viewed with more skepticism.  And that's with credit and repayment of debts ...

Credit bureaus ... creditors ... and mortgage underwriters ... view "catch up" with a much more critical eye.  In their eyes, missed and "catch up" payments raise doubts and concerns about an applicant's repayment abilities.  In turn, they ask that those doubts and concerns are adequately addresssed.

As of late, I've had a rash of mortgage inquiries where the mortgage candidate has mentioned they are playing "catch up" on payments they've missed ...  

The latest involved applicants hoping to convert their present Adjustable Rate Loan into a Fixed Rate Loan.  These homeowners had built equity in their home.  Their income was consistent and sufficient to successfully move forward.  

But ...

As they shared more of their financial information with me, they revealed that within the last year "maybe 1 or 2 mortgage payments" had not been made on time.  Also, their current payment still remained due.  

Uh-oh ...

Upon my asking for more info and background regarding those payments, the applicants questioned me as to why their late mortgage payments would matter?  They had successfully played "catch up" and made the payments.  In their eyes, they were current.  That was the bottom line, right?

Unfortunately, it's not that simple or easy when making application for a new mortgage ...

When navigating today's mortgage application and underwriting process, much rests upon the applicants' credit history and credit scores.  Should they presently hold a mortgage, their mortgage payments must have been made ON TIME, especially during the year leading up to their making their new mortgage application. 

Signs of "catch up" on a credit report can be a problem and stumbling block for a mortgage applicant on the road to a new mortgage approval.  In these cases, "catch up" can be viewed as a real negative.

Now I would never insinuate that efforts to repay credit commitments are wrong.  They're not.

But mortgage applicants must understand:  The consistency, timing, and timeliness of payments matter greatly. 

Mortgage applicants should also know:  Late or missing payments could affect their credit scores and the "approvability" of their new mortgage application.  

Why?

Mortgage Underwriters, during the underwriting portion of the mortgage process, will be assessing the mortgage applicant:

  • Reasons for the credit issues arising
  • If the issues have been resolved
  • If the underlying issues have been solved
  • Were the issues a one-time occurrence caused by health, employment, or other life-changing events?
  • Are the issues of a chronic nature?
  • More ...

In order to proceed to mortgage approval/denial, a thorough explanation (and subsequent proof) regarding those payments will be required by Mortgage Underwriters.  

So it's vitally imperative that any new mortgage applicant having late or missed payments at the time they make new mortgage application remain communicative and fully engaged with their LO.  They need to be completely (and quickly) forthcoming with information and answers to questions regarding their missed/late payments. 

During this crucial time in the mortgage and underwriting process, the Loan Officer will be of great assistance to their client.  The framing of the explanation received takes on grave importance.  Mortgage approval or denial rests upon the information and explanation provided to Underwriters.

Past missteps or laissez-faire attitudes towards credit or mortgage payments can come back to haunt you.  Timely consistent payments are a big deal to Lenders and their Underwriters.  They're an important part of what they're looking for when considering a new mortgage application. 

"Catch-up" just doesn't and won't cut it ...



* Hoping to Buy or Refinance a Condo, Home, or Investment Property in New Lenox, Will County, or elsewhere in the Chicago - Chicagoland area, IL or WI

Contact me!

I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:



Gene Mundt
Mortgage Originator - NMLS #216987 - IL Lic. 031.0006220 - WI Licensed #216987


American Portfolio Mortgage Corp.
NMLS #175656


Direct: 815.524.2280
Cell or Text: 708.921.6331
eFax: 815.524.2281


  

 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   
   Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender   

    


Gene Mundt, Mortgage Originator, a Mortgage Originator with 40+ years of #mortgage experience, that will offer you exemplary mortgage service and advice when seeking: #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of #Chicago, #Cook County, and elsewhere within IL and Wisconsin.

Your Referrals & Testimonials are Always Greatly Appreciated!















  




WHO Are the People That Will Help You Navigate Your Mortgage Process When You Buy a Home?


WHO Are the People That Will Help You
Navigate Your Mortgage Process
When You Buy a Home?


You've decided to become a homeowner ...

Congratulations!

For most people, that means it's time for them  to:

  • Seek and Choose a Mortgage Originator
  • Learn about the steps involved in the mortgage process
  • Educate yourself about the other professionals involved in the mortgage process 
  • Learn what real estate professionals you'll need to assist you as you navigate your journey to successful homeownership
  • Educate yourself as to their roles and responsibilities in the process
  • Take action!


The following infographic will help you accomplish that more smoothly ...

It's a roadmap for the mortgage process.  It will help you easily and successfully navigate the exciting home financing and buying path you're about to begin.  




I and the other professionals mentioned above will work with you every step of your home buying and financing process ...   

Please, don't be afraid to ask us questions should you not fully understand something.  Our goal is to thoroughly explain every step and to help you feel comfortable with the decisions you are about to make.

Should you be buying (refinancing) in New Lenox - Will County - Chicagoland - IL or WI:  Contact me.  I'll be happy to assist you in every way possible.  

Should you be in need of a referral for the other local real estate professionals needed during your process:  I'll be happy to help with that too.  With over 40 years of experience in the mortgage industry, I know the area's best.

Reach out soon.  I look forward to hearing and working with you ... 


* Hoping to Buy or Refinance a Condo or Home in New Lenox, Will County, or elsewhere in the Chicago - Chicagoland area, IL or WI? 

Contact me!

I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:



Gene Mundt
Mortgage Originator - NMLS #216987 - IL Lic. 031.0006220 - WI Licensed #216987

American Portfolio Mortgage Corp.
NMLS #175656


Direct: 815.524.2280
Cell or Text: 708.921.6331
eFax: 815.524.2281



  

 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   
   Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender   

    


Gene Mundt, Mortgage Originator, a Mortgage Originator with 40+ years of #mortgage experience, that will offer you exemplary mortgage service and advice when seeking: #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including: The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of #Chicago, #Cook County, and elsewhere within IL and Wisconsin.


Your Referrals & Testimonials are Always Greatly Appreciated!





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