Delinquency
Haven’t you ever paid a bill a few days after the due date? It happened to all of us, not necessarily because we didn’t have the money, but because we simply forgot about it. A delay of a few days on a bill is not such a big deal, yet, according to the definition of delinquency, theoretically, you were delinquent on it. For most invoices and bills there is a grace period. During that time, the company or the bank doesn’t initiate any other measures to recover the debt. As long as you pay your bills or make your loan current within that grace period, your debts are not in delinquency. But, if you fail to pay in full the amount due, you may be contacted by a collection agency.
Every borrower should know the definition of delinquency when they are granted any type of loan, but especially when contracting a mortgage. All other debts fade in front of a mortgage. You should do whatever it takes to pay it on time, every month unless you want to lose your property. It is better to postpone the payment of other unsecured debt than to pay your mortgage late. So, delinquency is not necessarily bad as long as you are aware of it and it helps you avoid foreclosure. However, ending up in delinquency too often may affect your credit score.
A home loan is generally delinquent for 270 days, counted from your last payment. So, in about 9 months, the bank may decide to foreclose on your loan if you don’t seek any kind of settlement. Just because your mortgage is delinquent, it doesn’t mean that you will lose your house. Yes, it is very likely for that to happen, but you can stop a foreclosure by making payments of any amount while your loan is delinquent. Be aware that your loan may accrue interest and penalties during this time, though.
However, there is a piece of good news. Loans are not considered delinquent until after 15 days past the due date. Most mortgages have this grace period of 15 calendar days which allows borrowers to pay their debt without incurring other costs. And as long as you pay within the grace period, your credit score is not affected.
Now that you know the definition of delinquency, we hope that everything is clear and you can better manage all your monthly payments.
Popular Real Estate Terms
The definition of accommodation covers different meanings of the word, but they all express providing space, room, either physical or metaphorical. In other words, accommodation can be ...
Marketable title that is free of encumbrances and disputed interests. Clear title is essential in order to convey a general warranty deed in a transaction. ...
Covering studs on the outside. ...
Heterogeneous (as opposed to homogenous) means diverse in nature applied to a place or object composed of separate and distinct parts. In other words, heterogeneous describes something that ...
Right of a current stockholder to maintain the percentage ownership in a real estate company by purchasing new shares on a proportionate basis before they are issued to the public. It ...
The external covering finish of a structure which protects it from the elements. Exterior finish materials, including shingles, siding, and paints, are design to resist severe weathering ...
When looking for the definition of a land surveyor, most definitions are quite simple and concise: a land surveyor is a person who measures the distance between two points, the angle ...
“What is Rent Control?”, you ask.Rent Control is how some governmental policies that prevent the Landlord from abusively raising the rent are called in the real estate ...
Series of intersecting lines dividing a map or chart into equal sections. Series of intersecting bars, wires or support as in a grating or supports in a dropped ceiling. ...
Have a question or comment?
We're here to help.