Missing payment of mortgage may cause you suffering but it does not mean it is the end of your financial goal. When you fail to fulfill mortgage payments, you may face negative consequences. But if you have a strong understanding or communication with your lender these consequences can be minimized. By choice, no one wants missed mortgage payment but still, it may happen because of insufficient money, especially in the first month
In general, by missed mortgage payment you can face your credit score plunge or it may cause you late fees. When you have a lot of missed payments, it can be an alarming situation and lead you to foreclosure. In further your credit will be damaged and you can become homeless but it will not happen at the sudden.
Timeline of The Foreclosure Process
There is always a certain time to start a foreclosure process. It may differ from place to place. At first, usually, you have 15 days after the due date of mortgage payment which is a grace period. If you pay then there is no problem but if you fail to pay in that time and also miss your very next payment, this is a time when things start to get complicated. Your credit score may get harmed if your lender reports you to credit bureaus or impose a late fee.
After the due date, if you pass more than 45 days, it is quite possible that your loan services involves another person and assigns your account. When you miss your 2nd mortgage payment which is after 60 days you will be considered as a defaulter. At this stage, your lender may become aggressive or impatient in collecting payment.
The process of foreclosure is time-consuming and difficult for the lender as well as for the borrower. So in the interest of both parties, their priority is always to set again their agreement. In this situation, some lenders modify the terms of loan giving back to make it more comfortable and affordable.
When you pass 90 days and have a missed mortgage payment, the situation becomes more critical. You will receive a warning letter at that time. In the letter, it is stated that you have only 30 more days to stay in that home and to pay your all-missing payments if you want to avoid the process of foreclosure.
What Can You Do if You Miss Your Mortgage Payment?
Contact with Lender
If you think you will not be able to pay your payments in the future. You should contact your lender so they can give you some relaxation.
Set Instead of Forgetting
Sometimes you may miss your payment, not because of financial issues but because you are on your vacation. It can be avoided by setting an automatic cheque payment method every month.
Suppose you are in such a situation that you cannot afford your payments, by communicating with the lender you can also downsize it until you become better.