question about making mortgage payments every other month

[twin_mama]

Has anyone done this?

We are entering into what I think will be the most financially difficult year for us.  I'm losing my job and will be looking for a part time job as opposed to the full time job I'm in now.  In addition we will have to pay for daycare for our two kids vs. now where daycare is free.

In one year both girls will go to kindergarten and I can get a full time job again without having to pay for daycare.  So basically if we can get through this next year, I think we will be fine after that.  It's just this year that is going to be challenging.

A family member brought up the strategy of paying our mortgage every other month or every three months during this year only.  That way the money that would normally go to our mortgage would go to food and gas for getting to/from work.  He said that this might start the foreclosure process but once the bank gets a payment from us it would stop the process.

We don't qualify for any state assistance, I've already checked.  My husband actually makes good money, it's just that our mortgage payment is too high.

We are already trying to rent out a room which will help a little.

Anyway, I just want to hear from others if you've done this and what the repercussions are, if any?

[mar123]

Once you have started the foreclosure process, it takes two months worth of payments to stop it, according to my mortgage company. Once you are three months deliquent (if you are making payments every other month, it would take 6 months for that to happen), you have to bring it current to stop it. Also, once it is turned over to attorneys, you have to pay their fees as well. This isn't cheap, trust me.

Have you talked to your lender? Have you looked into the Making Home Affordable Program?

My dh has been unemployed for almost a year, so I feel your pain. My dh lost his job due to the drilling moratorium caused by the oil spill. Because of that, we are eligible for a rig workers assistance grant. We have fallen behind in our mortgage but should be able to catch up once we get the grant (which was mailed TODAY). For a long time I had no idea when we would get it; I kept in touch with th mortgage company trying to keep it from  the foreclosure process. As soon as I found out when we would be getting the grant, I let them know. One week later it was turned over for foreclosure- so now we have to come up with an extra 4K to bring it current. That is 2.5 payments for us. I am so ticked. It almost seems like someone is getting kickbacks- they waited this long, working with me and sudeenly BOOM! I tell you when I can send the money, have a date in hand and then it's turned over? Grrr

Good luck with everything. It is tough out there.

[A&A]

If you know it's just going to be one bad year, I'd run up credit cards for food and gas and keep paying your mortgage each month. 

[MCsMom]

I would not 'plan' to pay the mortgage every other month.  I would be upfront with your lender from the get go, as in before you are even one payment behind and see if there is anything they can do to assist.  Maybe even make 'interest only' payments for a few months or something. 

I would look into renting a room, or two.  Start dog walking or delivering news papers or take in a child to watch or two. 

Good Luck, job loss is hard.

[PenelopeJune]

At some point, your bank will not accept anything other than the full amount of payments you owe. And then after that, they will only accept the full amount of the loan. I don't suggest it.

Your bank will also probably tell you that they cannot help you until you are 90 days past due on your loan. Do NOT take this as advice to not pay for three months unless you want your house foreclosed on. The bank told me this, and so I stopped paying for 90 days. (I honestly had little choice in the matter, as I couldn't pay, but I might have been able to scrape something together.) At 91 days I started begging for help. At 98 days they started the foreclosure process. There was never any help offered.

[zebra15]

Every month you don't pay the mortgage you are going to be charged late fees, interest and penalties. So when you do pay,you never will be caught up, you will always be running a negative balance with the bank.  For example you pay Jan, skip Feb, pay March, skip April. Come May you are 2 month behind plus fees so for May they really want 3 mos payments plus extras.

In theory if the bank let this go on for one year  you would be 6 months delinquent plus fees so closer to 8 payments would be due.  NO BANK is going to let that happen.

[Poddi]

I'm a bit confused.  Why do you need to pay daycare if you lost your job?  Can you just take a year off to stay home, until they go to school?  Not working outside the home can save a lot of money in work related costs, and time related costs (like by baking your own bread, cook from scratch).  I really wouldn't advise messing up with your mortgage.  Although if you have good credit right now, is it possible to get a line of credit or something?  Maybe a home equity one if you have enough equity?  That way you can buy some food, gas or other necessities with reasonable interest.  We have a HELOC with a rate of prime + 1%, which beats any credit card or regular bank loans.

Of course the best thing is to rework your budget and try to not borrow any money at all.  After all you're not sure that you'll be able to find a job once you have the time.  This forum (and the Internet) is full of frugal tips.  Maybe it's possible to cut down enough to make it through the next year?

[laura163]

I have been 30 days late on the mortgage, I have been 60 days late too. At 90 days the bank start to get really pissed off.  Pay what you can pay, but please don't be more than 89 days late!

[A&A]

Originally Posted by Poddi 

I'm a bit confused.  Why do you need to pay daycare if you lost your job?  Can you just take a year off to stay home, until they go to school?  Not working outside the home can save a lot of money in work related costs, and time related costs (like by baking your own bread, cook from scratch).  I really wouldn't advise messing up with your mortgage.  Although if you have good credit right now, is it possible to get a line of credit or something?  Maybe a home equity one if you have enough equity?  That way you can buy some food, gas or other necessities with reasonable interest.  We have a HELOC with a rate of prime + 1%, which beats any credit card or regular bank loans.

Of course the best thing is to rework your budget and try to not borrow any money at all.  After all you're not sure that you'll be able to find a job once you have the time.  This forum (and the Internet) is full of frugal tips.  Maybe it's possible to cut down enough to make it through the next year?

IMHO, CC's are a much better idea than a home equity line.  CC's are unsecured, whereas a HELOC is secured with your house. 

[Poddi]

Well if she's gonna skip mortgage payment she'll risk losing the house anyway.  I don't think HELOC would be any riskier than not paying mortgage.

[A&A]

Originally Posted by Poddi 

Well if she's gonna skip mortgage payment she'll risk losing the house anyway.  I don't think HELOC would be any riskier than not paying mortgage.

That's why I was suggesting she use CCs and not risk her mortgage in any way.

[HappyMommy2]

This sounds like about the worst financial advice you could receive!  Don't mess with the mortgage payments like that, it will ruin your credit and dig you into a hole very difficult to get out of. 

(And definitely DO NOT take any more financial advice from this person!)

While you still have a job - you can refinance and try to get your payments lowered.  Or since your DH has a job, you can still refi even if you are out of work, but it is better to do it now while you have more income.  Get that process started now!

If you are getting laid off, you get almost 2 years of unemployment.

I agree with PP - get really frugal and just stay home for a year with the kids.  Voila, no daycare payments, commuting costs, etc.

Getting really frugal is not that bad when you are used to living on 2 incomes.  Stop ALL but necessary spending now (bills and groceries).  There are lots of blogs to lower your grocery bill.  And there are lots of ways to lower your phone bill, insurance costs, credit card interest rates, etc. 

[texmati]

no way would I do this. We are also in a period of 'bad years' where I am staying at home for the next 2-3 years. I just quit a few months ago. We cut our lifestyle by a bit-- but if something bad were to happen here is our contigancy plan. We'd cut our lifestlye as much as possible; we'd run through our savings; then we'd start putting things for sale (car etc); and put our house up for sale as well. 

Have you considered moving? Do you have a car or anything else that you could sell that would help you get through a few months?

[Siennaflower]

I would not go this route.  Personally, I would stay home for the year and cut everything down to bare bones.  This would cut out daycare costs and the gas to get you to and from work completely.  The one bill I would make absolutely sure that I paid on time would be the mortgage.

[lilyka]

Originally Posted by laura163 

I have been 30 days late on the mortgage, I have been 60 days late too. At 90 days the bank start to get really pissed off.  Pay what you can pay, but please don't be more than 89 days late!

My bank got pissed after 15 days.  They were not taking any chances i guess.  They called me at work and called my ex husband and called me some more to the point I almost lost my job.

I agree.  There is no reason for you to pay daycare unless you are looking at one heck of a good part time job.  Daycare is expensive.  I could not afford it on what I am making.....
So some things to consider:  Your kids will be old enough for school next year.  What about a prek or head start program this year?  Or work opposite shifts from your husband if you must work.  Overnight shifts are plentiful, pay a little better and don't totally suck.  Or you can just stay home and be the queen of frugality.  You may be surprised how much money you save by not working.