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Old 05-12-2021, 01:52 AM   #1
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Default Mortgage increased due to bad credit, is it permanent or not?

Both my husband and I have had bad credit for years due to financial hardship. No judging please. I got a lot of that on another site and was called irresponsible, that it's our fault that we have bad credit for supposedly not paying bills or paying them on time which isn't true.

My husbands business was bad for along time and I haven't earned much over the years. We have owed the IRS a lot of money too.

Anyways, our mortgage for our house was $2900 up until recently. It went all the way up to $3400 which isn't fair at all! to many cards were opened up at once, and credit was denied a few times.

My husband told me that it'll take at least a year or more to repair bad credit. Once our credit score goes up that the mortgage can go back to the normal rate again. Is that true?

Is this new mortgage permanent or not? Btw, it used to be $2600 in the past, but I'm not sure when as my husband rarely discusses finances with me. I don't know if it had anything to do with bad credit or not.

How long will it take to return to the prior rate if it's nor permanent? Is there anything that can be done to prevent paying the few extra hundreds of dollars a month in rent?

I'd appreciate any helpful advice. No judging please. I'm already depressed, anxious and upset enough as it it I also have health issues and don't need the additional stress.
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Old 05-12-2021, 06:56 AM   #2
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Default Re: Mortgage increased due to bad credit, is it permanent or not?

From what I know of mortgages, they can be fixed or adjustable. I thought the fixed ones stay the same during the life of the loan. For example: 3% for 30 years. The adjustable ones start at one rate and then can adjust over a period of time so they can sky rocket up to an amount you may not be able to pay.

I havenít heard of a mortgage payment changing due to bad credit, but Iím not an expert. You could go into the bank who issued the mortgage and ask them directly, rather than taking your husbandís word. Maybe they tacked on many fees due to late payments and that is why you are now paying much more?

Maybe they started escrowing your taxes? Rather than you paying your property tax yourself, they can collect it as part of the mortgage payment. Iím just guessing.
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Old 05-12-2021, 08:17 AM   #3
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Default Re: Mortgage increased due to bad credit, is it permanent or not?

I work for a financial planner, so I asked him what reasons a mortgage payment would increase. Most common reasons are
1. Its an adjustable rate mortgage and rates have gone up. Rate increases are documented in mortgage paperwork.
2. Its a structured payment for a jumbo mortgage. Very large mortgages have structured payment increases to pay down the loan. The increase amounts and dates are documented in the paperwork.
3. Change in costs paid by escrow through your mortgage lender (usually property taxes and homeowners insurance)
4. Repayment of late fees/missed payments. Payments that were missed can be repaid over time by adding payments to current monthly payment. This increases the payment until the past due amount is paid off.

A mortgage statement will tell you quite a bit. Loan type. payment breakdown, past due amount, etc). It may be helpful to find an older statement to compare so you can see where the differences are in the payment breakdown. If your escrow payments have dramatically increased, its possible that property taxes have increased. If the interest payments have jumped, you likely have an adjustable rate mortgage or ARM. If the principal amount has increased, its likely a structured change in a jumbo loan. Repayment of missed payments and fees will be a separate line item in the payment breakdown.

I can't take away the stress this situation causes. I hope that the information helps you.
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Old 05-12-2021, 08:55 AM   #4
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Default Re: Mortgage increased due to bad credit, is it permanent or not?

Is it a monthly payment? 3400?

Your husband might not be telling you the truth.

Call your lender bank and talk to them. You donít need your husband to tell you stories. Bank will explain to you.

You either have late fees or some kind of adjustable mortgage rate (no idea what those really are), your taxes are escrowed like Tisha said and taxes went up. But then again it doesnít happen all of a sudden. Our taxes are escrowed but we signed up for it, itís not like it was ambushed upon us

Overall itís insane increase. Is it a monthly payment? I might be completely off but is it better to sell and get something much smaller and affordable? The other option take on a roommate and collect rent from them to help out

We make decent middle class income but it wouldnít be affordable for us to pay 3400 a month in mortgage. Or am I reading it wrong
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