SCHNEIDER Real Estate, Inc.
Roger Schneider, SCHNEIDER Real Estate, Inc.
Email: [email protected]

Consequences of Missed Mortgage Payments

by Roger Schneider 03/22/2020

Photo by: NeONBRAND via Unsplash

Missing a mortgage payment is not the end of the world. Many lenders are more than ready to work out a payment plan if you’re going through a rough patch or budgetary crisis. However, you may end up doing more harm than good to your credit and home ownership if you don’t contact your mortgage lender as soon as the financial need arises.

Below are things to remember about a late mortgage payment.

1. Mortgages Come with a Grace Period

Even if you pay one day or five days after the due date, it still might not be considered late since many lenders offer a grace period of about five to fifteen days. If you want to know about your specific grace period, contact your lender for grace period information.

2. A Late Fee Will Appear

If your payment is delayed, then it will most likely incur a late-payment fee. You can expect to pay the late fee in your next mortgage payment. Work with your lender to see if you can avoid a late fee by setting up an automatic payment method or if there are other clauses in your contract to have the fee waived in extreme circumstances.

3. Damage to Credit Score

A damaged credit score is one of the adverse effects of a late mortgage payment. Your payment history is of uttermost importance as it can affect your ability to secure financing of any sort in the future. Your lender usually reports your payment history, and if you are thirty days behind, your credit score may feature “late 30” next to the loan. This mark could drastically hurt your overall FICO® score.

4. Suffer Drastic Measures

When you suffer delinquent payment beyond 90 days, your lender automatically considers you in default on your loan. If left without a written waiver or payment arrangement, they may start to take foreclosure actions against you, which could lead to more public actions and eviction from the home. There are other things that can be done to retain your home, however. Bankruptcy affords the ultimate protection until your debts can be assessed and discharged by the government but should be a last option since it can remain on your credit report for ten years.

5. The Account Goes to Collection

Your account can go into collection if you are behind your mortgage payment. In that case, you will receive a phone call or a letter from your lender about the late fee and that your account is being sent to a collection agency.

Every borrower’s situation is different, depending on credit score and payment history. If possible, avoid falling short of your mortgage payment. The earlier you make the due payment, the better it is for you, but if you’re unable to, set up an arrangement with your lender.

Still have more questions about mortgages and how to successfully nail down the right price for you? Contact me, and I’ll point you in the right direction.

About the Author
Author

Roger Schneider

SCHNEIDER Real Estate, my family's business has been at the forefront of our area's Real Estate transactions for over 40 years! With experiences in the following areas; St. Charles, St. Louis, Lincoln, Warren, Jefferson County, I help both buyers and sellers meet their real estate objectives. I have extensive knowledge of each of the communities located in and around St. Charles, and I will work tirelessly on your behalf to make your next St. Peters home buying or OFallen home selling experience a pleasant and successful one.For sellers, it is my commitment to help sell your home or property in a timely fashion while helping you attain the highest possible price for your real estate. If you are interested in receiving a free home valuation, I encourage you to fill out my free home valuation form.For buyers looking for homes or other real estate opportunities here in St. Charles or other surrounding communities, I will work with you to find your ideal home. I will provide you with all of the necessary tools for finding the right property. From free access to search almost all St. Charles, St. Louis, Lincoln, Warren, Jefferson County area homes, to the ability to fill out My Dream Home Finder Form, everything I can possibly provide will be at your service. In addition, once we've narrowed down what you are looking for, we can begin the home showing process so you can get a closer look at the homes that should be a good fit. I help negotiate the best possible deal for my clients with each and every real estate transaction.Nothing satisfies me more than seeing the smiles that come with a successful real estate transaction. Thanks again for considering me as your Realtor.