Mobile Home Financing & Loans
What if I make my payments late?

Late Payments, especially in the early part of the loan are really bad news.  First of all, the lenders watch loans to credit challanged buyers like a hawk during the first few months.  Many times the dealer is has to make the loan good if the buyer defaults during the first few months.

In addition, the numbers really work against you and make it hard to recover.

To continue with the example from the life of a loan page, what if you show up with your first payment a week late.  Unfortunately, interest continued to accrue during that week so your receipt will show that you paid $600 and all of it went for interest.  Even worse, the amount you owe is now $50,025.  So your loan got larger,  not smaller. This is not good. 

If you showed up in three weeks with your next payment, this would not be a big problem.  You would only owe three weeks of additional interest (plus the unpaid from your late payment) so if you make the second payment when it was originally scheduled, you would be pretty much back on track.

But people don't do that!  If they had trouble making a payment on time they probably have trouble making the next one in less than four weeks.  Before you know it, you have been making payments for two or three years and you still owe more than you did at the start. 

When they find that out, people start calling their lawyers, convinced that someone is cheating them.  The reality is chronic late payments early in the life of the loan can put you "Under Water" for years. 

A large loan is kind of like a huge boulder you are trying to move with a long stick.  Your regular payments (force on the end of the long stick) give you the power to move the boulder (pay down the loan), but if the boulder slips back (loan isn't paid down) the end of the stick will hammer you into the ground.