I’ll keep this short. Need to pay the mortgage by the 16th (today’s the 14th). We’re about $200 short, and that’s if we don’t spend any money for anything else (like Xmas presents or gas for car).
Should I:
Ask my cheap, set-in-his ways boss for some kind of cash advance? The business is government contracting and they’re generally not able to respond quickly, so might not be able to help, especially since they’d have to do so essentially today. Also, I got a (modest) raise 3.5 months ago; would this make me look bad in his eyes?
Ask my mortgage lender for an extension/skip a payment kind of thing? We refinanced this spring, and have not missed any payments (uh, until this crisis). Since we’re a new customer, would asking for such consideration cause them to “place a note in our file” or otherwise negativvely impact the relationship?
Fill out this credit cardf application I got in the mail, and use it? Terms are, if I have read it correctly, no annual fee, no interest for the first year if I pay on time, 3% fee for cash advance. And if I do use it, should I try and pay directly with the card to avoid the cash advance fee, or use the cash advance so I can just put a few hundred on the card instead of the whole mortgage?
Beg relatives to bail us out at Christmas? (Ugh)
Profit! (I wish)
Disclaimer: We have had money struggles for a long time, ever since I lost the really good job 5 years ago, I’ve never gotten back up to the money I was making then, or even close. I do plan and budget, but it’s often close to the wire, even without much luxuries. I don’t spend much money on myself at all.
We just had to buy a new car this summer, among other things; got a Toyota Yaris. This month we knew money would be tight. Unexpected veterinary bills made it very white-knuckled, but still possible, until I failed to be expressly clear to my wife exactly how little money we could spend this paycheck, and she spent a little right after getting paid, leaving us with this situation.
I’ll get paid on the 21st, which is too late for the mortgage, but would be juuuust enough to cover it (or pay off the credit card, or otherwise pay back whatever we will have used by the 16th to cover the mortgage). And working with my wife, we ought to be able to cover the next month’s mortgage and association fees from the following paychecks (hers and mine) and work our way back to our regular payment schedule eventually.
Any advice on which path offers the least damage to our reputation, and/or risk of hideous debtor’s prison?
Number 2 for sure. Ask for a 1 month Forebearance on your payment most companies if you are in good standing will grant these. When my wife and I were younger and just getting into our first house over a decade ago we had to do this and the mortgage company was happy to work with us…
That being said if you are in good standing with your mortgage company call them now, and either ask for a 1 month forbearance or tell them your situation and see if they wouldn’t mind if you paid next week, or at your next pay period…you may incure a late fee, but if they mark your account as you called and asked to pay late it wouldn’t be a default.
Unless you are in a category that you are not telling us about…i.e. not in good standing.
p.s don’t do the credit card thing…too many bad things could come of it. And it not a good habit to get into.
Pay what you can on the mortgage. Call and explain and see if they will accept a half payment. You’ll get hit with late fees, but it wll show you are trying.
I’m not sure what this means. To me, an overdraft is when I’ve written a check for more than my account contains, and the bank doesn’t honor the check, and both the bank and the party to which I gave the bad check penalize me with fees and possibly bad credit. That doesn’t sound like something I’d want to do, so I assume you mean something else…like a cash advance?
Round my way, an overdraft is a prepared agreement between you and your bank to overdraw your account up to a pre-agreed amount. So cheques and withdrawals will be honoured up to the ‘overdraft value’.
Exactly, for instance, our savings account has an overraft with our checking account . If we happen to write a check for more than we have in a particular account the over funds are drawn from savings.
My credit union does this too but it’s not called an overdraft. They call it overdraft protection. Basically they set me up with a line of credit when I opened the checking account and if I overdraw my account they dip into that line. There might be a small fee (or interest charge or both) but it’s nothing compared to the fee if I didn’t have that safety net (which I have not yet needed–knock on wood).
Back to the OP, I’d start with option 2 and if that doesn’t work go to your bank and see if they can help you out. I would personally never go to my boss and would only go to family if it were a true emergency. Alternatively, is there anything you can sell quickly?
Admitting weakness? It’s the holidays, these things happen. And unless you know the other person on the other end of the phone when you call, I wouldn’t feel crappy at all about asking this. You won’t be the first, or the last and it is not weak. If anything it shows you want to pay but you just need a little assistance this time…honesty is not something to be shy about.
Call your mortgage holder and tell them you’ll make $X payment on the due date and the additional $X on whatever date. Tell them you will pay whatever late fee they assess at that time as well.
Many mortgage lenders will not turn you in to the credit reporting agencies for a late payment if you make the entire payment within 45 days of the due date, so the late payment may never show on your credit history.
ETA: re: weakness…don’t worry about that. I had perfect credit til my husband had to quit working and I spent the few months between then and bankruptcy explaining to my creditors why I was preparing to screw them over. We got to keep the house by the skin of our teeth, and there was a three month period where I didn’t know when I would pay the mortgage or how many payments it would take to do so that month. If I lived through it, you can too.
Im a loan officer and a collections officer at a credit union, and people routinely call me requesting to defer a payment for a month or so. Unless they are repeat offenders, I never bat an eye. Things just happen. I’d much rather work with someone, than take their car / snowmobile / house.
I too would suggest the overdraft protection / draft line of credit. I generally recommend to those who wish to apply for one, that they apply for at least the same amount as their monthly mrtgage payment, for this very reason. You pay interest on it, but it’s a pittance compared to late fees / bouncing checks.
I don’t know if people find them predatory–I know nothing about their rates or anything else. But I will chime in to say I recently learned that this is exactly what pawn brokers specialize in. Their main business is not people who are selling things off to raise cash, but people who have short-term cash flow problems, people who intend (and do) redeem their hocked items once they get paid in a week or two.
Whether or not this is an option for you, or makes sense given the costs (whatever they are) is another matter.
If you get that credit card, you’re going to want to use it for more than the mortgage, but also to buy Christmas gifts. Then you’ll be stuck with a bunch of gifts and a mortgage payment on a credit card, when you couldn’t afford them in the first place, thus vastly increasing the probability that you’ll be in this same situation in regards to your mortgage in January and February and March and…
Plus, the small hit to your credit history of one late payment (which it won’t likely even register if you’re only a few days late, and if you call first) is nothing compared to the long term effects of having a credit card you can’t really afford open (hard credit checks, change in your available credit/income ratio and debt/credit rations), and potentially missing payments on that, too.
So beg relatives (I’d go there first, personally, but I don’t know how things are with your family), ask for an extension, find some very short term thing you can do to make money (sell something on Craigslist? do a medical study? shovel driveways?), ask ‘Modest Needs’ for help, beg your boss (I’d save that for last just because you don’t want to affect your work situation with personal money woes), whatever. Just don’t mortgage your future to pay your mortgage today.
Everyone else has given you great advice about your immediate needs, so let me chime in with a suggestion that may help mitigate future money-crunches due to large, unexpected vet bills.
I’m the last person to recommend living on credit; we pay our credit card bills in full every month with one exception – cards we have that carry special payment options. In this case, I’d recommend the Care Credit* card, which is designed strictly for veterinary expenses. The reason I like having this card on the side is, if I have large vet bills that I can’t (or don’t want to) cover in a single month, I don’t have to put it on my regular credit card which would incur relatively high interest if I carried a balance.
Instead, depending on how much the vet bill is, with the Care Credit card I may have anywhere from 3 to 18 months no-interest payment options. With the vet bills isolated from my regular spending, and qualifying for same-as-cash payment plans, it helps spread the pain of unexpected, large vet bills out, which is a big help when it comes to monthly cash flow.
Good luck!
*Check first to make sure your veterinarian accepts it, and if not, ask him or her to look into it, if they haven’t already. Or perhaps find a vet who already accepts it.
[quote]
What CareCredit Offers Your Clients [ul][li]An exclusive line of credit for their pet care expenses, freeing their cash and major credit cards for other purchases.[/li][li]An easy solution to the dilemma of whether to accept costly treatment for a pet.[/li][li]Flexible, low monthly payments with no up-front costs.[/li][li]The choice of several payment plans, so clients can use the one that best fits their needs.[/li][li]No application fee, no annual fees, and no pre-payment penalties.[/ul][/li][/quote]
I hope when you read this you see how silly this sounds. This is business. It has nothing to do with strength or weakness.
You also realize that you need to call them today - as soon as possible. Really, don’t wait another minute. Just bite the bullet and give them a call. Explain the situation and explain exactly what you are able to do.
I called the mortgage lender – a credit union, actually – and the lady in “mortgage collections” said they do not take partial payment, but they do have a plan where you can take this month’s amount due and split it into 2, 3, or 4 parts and add it to the next months’ amount due. I chose to split it into two parts, meaning my mortgage will be half again as large in Jan and Feb, but after that, back to normal.
It might have been better to split it up 4 times, so as to minimize any one monthly hit, but I’d like to get out from under this as soon as possible, and I do feel we’ll be able to make those payments, as long as I stay tight-fisted, since we’re now effectively paying nothing in December.
I will also look into that Care Credit suggestion for the menagerie, thanks!
Sounds like a pretty typical forbearance arrangement. It’s definitely better than being 30 days late on the mortgage, which would have a significant effect on your credit score.
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