There may be times when you cannot afford to pay a mortgage payment due to illness, or even job loss. Unfortunately, not paying this bill has consequences. But, the results can often be minimized if you communicate with your lender. It is imperative to be proactive if you think that you are in financial troubles.
What happens if you miss a mortgage payment?
Not making one mortgage payment or falling a month behind will undoubtedly not prompt a foreclosure. For that to happen, you will generally have to fall at least two months behind while also failing to communicate with your lender. That does not mean that a single missed payment won’t trigger some negative side effects.
Calling your lender to discuss your financial situation will help them understand your position and negotiate a reasonable outcome.
In general, not paying your mortgage will be reported by your lender to the credit bureau and they will lower your credit score.
In addition, after a grace period, a late fee will be added on to the payment you did not make.
What should you do if you can’t pay?
The First option when you can’t pay for mortgage payments is to call your mortgage broker for refinancing. If your budget is not already overextended this can be a great option.
Not all banks or lenders will be understanding. Many will be, however, as working with a struggling customer who has a good track record of paying on time tends to keep things from escalating to foreclosure.
The worst thing consumers can do is disregard the issue entirely. If you cannot afford the payments for more then 1 payment a great option is to downsize.