Posted on: 01st Oct, 2010 06:34 am
Hypothecial question.
Say I make 1 additional payment on my mortgage for the first 10 years. So after ten years, I'm essentially 10 payments ahead of schedule. During the 10th year I lose my job, or some other emergency happens, and I miss 5 payments. Can the bank foreclose on the property even if I'm technically 'ahead' of my mortgage payments?
My wife and I are considering making 1 additional mortgage payment each year, but I'm wondering (with the current state of the economy) if it'd be a better idea to just put that into a money market account instead, and have it in the event of any emergency.
Say I make 1 additional payment on my mortgage for the first 10 years. So after ten years, I'm essentially 10 payments ahead of schedule. During the 10th year I lose my job, or some other emergency happens, and I miss 5 payments. Can the bank foreclose on the property even if I'm technically 'ahead' of my mortgage payments?
My wife and I are considering making 1 additional mortgage payment each year, but I'm wondering (with the current state of the economy) if it'd be a better idea to just put that into a money market account instead, and have it in the event of any emergency.
Hi erobinson32,
Welcome to mortgage fit
Although your concern is good but still bank will consider it as 'delay on payments.' so you are advised to save it in money market account or any high yield savings account so that your money will also grow and it can be used for any emergencies....
One addition to this answer is......If you want to avoid any emergencies (you can't completely avoid it but at least you can minimize it.) in future make use of 'insurance' as a tool.
Insurance of the house, health insurance of all family members,insurance for the business (if you are self employed) are some of the good tools to minimize the appearance of emergencies.
Feel free to ask any further query if you have.....
DIPA
P.S. I wasn't logged in May be it could be one of the browser's problem...
Welcome to mortgage fit
Although your concern is good but still bank will consider it as 'delay on payments.' so you are advised to save it in money market account or any high yield savings account so that your money will also grow and it can be used for any emergencies....
One addition to this answer is......If you want to avoid any emergencies (you can't completely avoid it but at least you can minimize it.) in future make use of 'insurance' as a tool.
Insurance of the house, health insurance of all family members,insurance for the business (if you are self employed) are some of the good tools to minimize the appearance of emergencies.
Feel free to ask any further query if you have.....
DIPA
P.S. I wasn't logged in May be it could be one of the browser's problem...
Thanks for the info. We have all our insurance needs covered. I was mainly just curious how the banks viewed a scenario like this one, and couldn't find the information anywhere online.
I think we will likely make an extra payment anyways. We have built up an emergency fund of about 5-6 months expenses already that we can fall back on if need be.
I think we will likely make an extra payment anyways. We have built up an emergency fund of about 5-6 months expenses already that we can fall back on if need be.