Can You Skip a Second Mortgage Payment?

There many people who believe that skipping a second mortgage payment is acceptable — especially if they are upside down on the first mortgage. This is because if a second mortgage lender decides to foreclose, the first mortgage lender is likely to get everything. Many home owners take this to mean that a second mortgage lender won’t foreclose, even if you skip payments, because it woudn’t do the lender any good. This tack may be faulty, however. Don Taylor points this out on Bankrate.com:

Some homeowners have taken that to mean they can do as they please in terms of making the loan payments on the second mortgage. That’s a risky route to take. Your action could force the lender to take steps you didn’t envision. I can’t be much more specific than that because the lender’s remedies depend on applicable state laws. You should discuss this topic with a real estate attorney before pursuing that route.

Skipping payments will have a negative impact on your credit report and credit score. Working with the lender to obtain relief on the terms of the second mortgage is a preferred alternative.

It is better to see what you can do in terms of loan modification or some sort of special refinance before you decide to start skipping payments. While it may seem tempting, the fact of the matter is that sometimes your decision could have unintended consequences. Try to work through the possible outcomes of different scenarios, and if you want to stay in your home, do what you can to make it work.