Things to Remember about Missed Mortgage Payments

by Rob Godar 11/10/2019

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

Rob Godar

Greetings everyone; those of you I know and those of you I’ve yet to meet!

My name is Rob Godar and I thank you for joining me on my journey as I share my long-time passion for Silicon Valley Real Estate.

My path to being in business for myself started at a young age. I am a proud Third Generation California native, growing-up in Sunnyvale. It was here that I began my entrepreneurial journey. I was a paperboy for both the Sunnyvale Daily Standard and the San Jose Mercury News. Up before the crack of dawn, and out collecting subscriptions long after the sun went down. I have fond memories of playing in the Metro Little League at Raynor Park. After graduating from Archbishop Mitty High School and attending both DeAnza and SJSU, I ran my own consumer electronics business for twenty years, learning much about business ownership and about the world of “sales”.

It was during this time of my life that I developed my passion for real estate. Initially, I became a homeowner, back when double digit interest rates were the norm. Talk about scary! I then began looking at real estate everywhere I went….on vacation, on my days off and even when out on dates with my now wife, Linda. We have been real estate investors for over 30 years and I’ve been an agent for over 12 years.