Question:

Should I refinance if I have late house payments?

Answer:

Yes, you should. If you have late house payments and you know you will have hard time catching up, you should really talk to your lender for a streamline refinance. If they are still holding your loan in their portfolio, this can happen for a minimal fee and will save you from a lot of trouble. If you cannot refinance right away, try negotiating a forbearance plan with the lender.

Often, the lender will agree to temporarily suspend your payments. Interest, though, continues to accrue and will be added to the principal once the forbearance agreement expires.

If you are certain you can't keep up with payments, apply for a refinance. Having late payments on the house means you can't afford the payments. Act quickly so that you don't have to fight with foreclosure date. Your purpose will be to get a new loan with smaller mortgage payment, perhaps an ARM with minimum or interest-only payments. However, don't rest assured you're a refinance is your way out. If you don't take measure to avoid late house payments again, you may end up in the same situation.

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