What Happens If I Miss A Mortgage Payment?

By Author: Jake Stanford
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Did you take a long-term loan, eh? So you could get a house. Well, the thing is, there is this matter of paying the principal and interest monthly. It is usually burdensome as the year goes by as your personal finance might turn on you.

The fear of foreclosure is a huge concern these days. That is why I think you want to really know what default would mean. The home and the land you bought is collateral. This means if you default and don’t meet up with your payments for a particular period, well, you could lose your home.

About Mortgage Payments
The size and term of your loan are crucial factors that decide your monthly mortgage payments. The amount of money you borrowed will definitely determine the time it would take you to pay it back and the amount you would give monthly. So, obviously, the term varies indirectly with your monthly payments.

Choosing Between Life and Paying the Debt
The bank definitely wants their money back, trust me. They don’t want to lose out, and sometimes the world might turn on you tightening every space about you. Your health may depreciate, causing your medical ...
... expense to appreciate, that would mean financial strain, you may even lose your job. The truth is, sometimes there are more urgent payments than your mortgage payments.

Yeah, Maslow’s hierarchy of needs might actually pull you to notice that your family might have to take on a bulk of your income. Hence, the tendency of your missing a mortgage payment and missing payment for 90 days means you might lose your home. Yeah, the foreclosure process kickstarts.

Food, clothing, and shelter are basically the needs of man as they would affect your well being medically and psychologically. It may not be easy having to choose. What? No, you may not be able to undo the effect of not meeting the crucial needs of life. So, it may not even be a difficult choice to make.

Skipping one mortgage payment won’t really hurt.

Look, we all need to survive. So, if you make this decision of skipping a monthly mortgage payment, it is okay. You can definitely recover from a missed mortgage payment, but starvation and death are scars that will never go away. They are more than scars.

It might seem a catastrophe, being late with a mortgage payment or incurring a missed payment. Well, it ain’t the end of the world. Your mortgage lender has this interest in working with you, fixing loopholes, and figuring out a payment plan when you are in a financial strain. Make sure to contact your lender.

Can I Miss Mortgage Payments?
The truth is, when you miss a payment, you may incur a long term effect on homeownership and credit. However, if you act right, it won’t be the end of the world for you. You might avoid the repercussions.

Mortgage lenders are concerned about your consistently making your mortgage payment. They will work with you to avoid any bridge or halt in payments. If you communicate early with your mortgagor, the negative effects you would incur can be minimized.

Don’t worry. Missing one mortgage payment won’t mean your facing foreclosure. You will need to fall short for at least 90 days without communicating with your lender before that happens.

Well, missing one payment will cause credit bureaus to reduce your credit score. You will also have to pay an additional fee, known as late fees, which are added 15 days after the due date of the payment. These 15 days is your grace period. Failing to pay this late fee will make your mortgage not to be considered current.

Let’s get right into the question.

What Will Happen if I Miss a Mortgage Payment?
Your lender will contact you if you miss one mortgage payment. The lender may send you a document, perhaps in a letter format. It is very important to note whatever information contained in that letter should alert you on the actions the lender may take.

1. You Have a Grace Period
You Have a Grace Period

After the due date of which payment, if made, won’t be considered late, it is called a grace period.

The grace period is usually a week to 15 days. That is after the due date.

2. You Will Pay Late Fees
If the payment is officially late, the lender is authorized to take a late fee, which is part of your mortgage contract.

Note: If your payment is late by a few days after the grace period, there won’t be a negative effect since payment must be 30 days overdue.

Many lenders will offer you a loan modification if you miss a payment. It is advisable to contact your lender or servicer immediately you miss a payment.

3. Rolling Late
You can’t forget about your missed payments and continue with other payments. If you miss one month, your next month’s payment is considered a late payment since it is supposed to be the previous month’s payment. Hence, you will have to pay a late fee.

Let’s create a scenario, say you miss a mortgage payment, but then you made your payments for six months on time. Six late payments will be shown on your credit report, and you will have to pay six late fees. This is termed rolling late. It affects your credit score negatively.

To curb a rolling late, you will have to make two mortgage payments while paying for the next month. You will include the missed payment with the next payment so your credit score won’t be damaged by roll late.

4. Your Credit Score Is at Stake
It is important to note that your mortgage lender reports your payments monthly. Each credit bureau takes note of this report. Your credit score is pretty much affected by your payment history, so when your payment is past due, it will affect your credit. You might find it hard to get a credit card or financing new purchases.

5. Extreme Measures
Your lender will begin foreclosure actions against you once you don’t meet up with 90 days on your payment, you will be considered a default on loan.

A foreclosure will lead to a public auction and eviction from your home.

Court action and foreclosure are normally the last resort lenders take. So, before then, you should have sought financial advice.

How Many Can I Miss Before I Am Foreclosed?
You receive a notice of default from your lender if you don’t notify your lender when you miss a payment. This is, however, the first stage of foreclosure.

Avoiding foreclosure will benefit the lender and the borrower, so your servicer will try to work things out with you.

Basically, after 90 days, and you did not meet up with your payment and did not talk with your lender, the foreclosure process starts.

Timeline of Foreclosure
You get 15 days. Pay within this time, you are fine. Late fees are added if you miss another month and you are reported to credit bureaus.
You are in default if you miss the second month. Things might become more assertive with your mortgage servicer. But you can still reach an agreement. Remember, they also don’t want the whole foreclosure process.
After 90 days and you don’t agree with your lender if you miss three more payments, a warning is sent to you, and you have just 30 days to meet up.
Foreclosure starts once the 30-day has ended and there is no agreement reached.
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The thing here is, to avoid the whole negative effects, be sure to make timely and full mortgage payments.

Be sure to call your lender if you notice a financial difficulty and likely missed or late payments and explains your status.

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