Response For What Happens If I Miss A Mortgage Payment?

Answer for "What happens if I miss a mortgage payment?"

Julie Emerson, Associate Broker, Real Estate Agent

EXP Realty

Are you like “OMG! I forgot my mortgage payment! What happens now? Will I have to pay double the value I had to pay?! Are the cops coming to get my house?!”

Calm down. It’s not the end of the world. Maybe nothing happens at all!

Here’s the deal: some mortgages come with a grace period. So consult the paperwork to figure out if yours is the case because you might be suffering and barricading the home for no reason. Mortgage grace periods are typically from 10 to 15 days, so you might not be late; you might still be able to mail the check.

If not, it’s extremely important that you take the appropriate measures to rectify the situation because although there are no immediate effects, in the long run, you can have not only your credit score damaged but also the status of your homeownership too.

What happens when you miss a mortgage payment is that, first, a late fee will appear on your next statement. That late fee is usually 5-10% of your monthly mortgage payment. Next, you will likely get a phone call from the Lender about your defaulting. The context of that call will vary from lender to lender and from your own history too. If they believe your inability to pay is only temporary, they might try to work something out so you’ll have a month or two to get things up to speed and make the loan payments current.

If they consider your problem a bit more serious, they might transfer you to their collections/loss mitigation department to see if you can apply to some sort of forbearance agreement or even loan modification and stay in the home.

Note: it’s of the utmost importance that you ANSWER the calls and talk to them. If you keep dodging them, they will consider you will have no intention to pay the loan. If you get to 90 days late – even if you paid the subsequent mortgages – they will likely take measures within their rights to start the process of seizing your home and putting it up for a foreclosure auction. What can you do if that ship has sailed, you did your best but failed to revert the situation? Calling for bankruptcy can provide you with some protection and buy you some time until your debt is assessed and discharged by the government.

Either way, now that you know what happens when you miss a mortgage payment; it’s better to just *not* miss a mortgage payment; right? Better yet: why don’t you change your focus and start wondering about the effect of paying extra principal on your mortgage? Your wallet will appreciate that!