How Does Reaffirming Mortgage Affect Credit Score?
Filing a bankruptcy even if you still have your mortgage should have you reaffirming it so that
you’ll be able to keep your home. Doing this will have you creating a new loan agreement that
you will be obliged to pay for every month. Another good thing about reaffirming your mortgage
is that you can give your credit rating a quick boost if you get to pay for your bills on time all the
time; however, missing out on it may have you losing your home.
Everyone probably knows that filing for a bankruptcy will only do damage to your credit
even if you reaffirm your mortgage right away. It will remain on your credit for seven or
even 10 years and it may have a huge effect on your future transactions because your
credit score will surely make a huge drop. Practice good financial habits and you’ll save
yourself from filing for bankruptcy.
Reaffirming your mortgage may have its benefits but again, there are still risks that go
along with it. Foreclosure of property is probably the worst thing that could happen if in
case you won’t make your payments on time. And of course, late payments and missed
bills will reflect on your credit score and credit report that can stay for years, even if
you’re done paying for it.
Reaffirming, of course does have its benefits especially if you can pay for all of your bills
regularly. Not only will you boost your credit score, but you will be able to save your
mortgage within a specific timeline. Declaring a bankruptcy will mean that you no longer
have a monthly income which means you won’t be able to make your monthly payments.
If you decide decline in reaffirming your mortgage, then you might as well walk away
from your house and start back from scratch as soon as you get over your bankruptcy
declaration instead of continuing to pay for your payments on time.
If you plan to file for bankruptcy, your options will be, reaffirming your mortgage, give up
your property or pay off your mortgage. If you choose to reaffirm your mortgage, you will
be required to make payments till you get your bankruptcy cleared; if you do choose to
surrender your property, you’d be required to make monthly payments, but you will of
course lose your home. But if you have enough money to pay for your mortgage to finish
it off, then you can happily keep your property without even reaffirming your mortgage at
Your credit will do you a lot in the future. It will help you out with your loan applications, job
interviews and even the place where you’re planning to stay. Try your best to avoid the things
that will damage it and keep on boosting it whenever you can. Have a regular credit score check
and maintain on keeping your credit as healthy as possible.
Want to refinance you home with a second mortgage? Get your credit report first and also get
an estimate about your house’s value. Also, keep check your credit scores before taking any big