Worst Thing to Do When Missing a Mortgage Payment

Worst Thing to Do When Missing a Mortgage Payment

This game called life can sometimes lead to some challenging times where we may fall behind on our bills and make a late mortgage payment. This could be by accident or by circumstance. It’s important to understand the different stages of a late mortgage payment before talking about the worst thing that you can do if this should happen to you… Because you may just be in a grace period and not even know it!

Hey, it’s Jeff Chubb. Welcome to the channel. To learn more about real estate and your options should you be behind on your mortgage, then don’t forget to click the subscribe and like button below. And if you want to talk Real Estate friend to friend… And confidentially might I add, then find my info in the description below!

Most people think that they are late on their mortgage on the second of the month. This is incorrect. Banks give you a 15 day grace period. Essentially there is no penalty for making a payment up until the 15th of each month. And as a heads up, the bank needs to be in receipt of the payment. You can’t have put it in the mail on the 14th.

On day 16 through 30 Days is when a borrower will normally incur a late charge. This fee is usually between 4 and 5% of your monthly payment. So if your payment is $2,000 then expect a fee of $100.

30 Days late is when the lender will report your late payment to the credit bureaus. This will negatively affect your credit score and will make it more difficult to borrow money whether that be for a new car, new couch or even to refinance.

At 45 Days late, the lender is required to assign someone to your case to inform you of your options. I talk about these options in the video above and will have the video at the end of this video as well.

60 Days late is when the compounding affect really starts adding up as they will charge you for a second late fee plus the additional mortgage payment. So if your mortgage payment was $2,000 a month, now you owe the bank $4,200. You can start to expect multiple calls from your lender.

Around 90 Days late is when you can start to expect letters from your lender informing you that foreclosure proceedings could begin if you do not catch up on those payments. And to continue with the compounding affect, you would now need $6,300 to cure your mortgage… That is not a small chunk of change.

120 days late is when the lender may initiate foreclosure proceedings. Now foreclosure timing varies by state to state.

So, what is the worst thing you can do throughout this process… That is hide from the bank. It’s almost human nature to dodge those phone calls and hide under the couch. But doing that will only make the bank act quicker and put your file towards the top of the pile.

While this is your home, to the bank it is an investment. If no one is answering then that creates a question as to whether their investment is being taken care of. The last thing the bank wants is for the property to be abandoned. This is where pipes could freeze, squatters could enter or when people could go in and destroy for fun or to strip the house of anything valuable. The banks want you in the property while they proceed through the foreclosure process.

So, when that bank calls for the 327th time to ask for payment. Kindly cut off the person on the phone and let them know that you do not have the means to make the payment today and that you are still residing in and maintaining the property.

And do NOT make a partial payment. I talk about why in this video here. It’s a waste of your money.

Doing this will give you more time as there are a limited number of resources and they will put their efforts and focus into the properties that have been abandoned or they think may have been abandoned due to the seller not responding to their contact attempts.

I know it is tough. I know it is annoying, but answer that call. Because otherwise, that is the worst thing you can do when missing a mortgage payment.


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