What Happens When You Are Three Months Behind on Your Mortgage?
- Lenders charge late fees with each mortgage payment you miss. In addition, an extended late fee per billing cycle may also be required. These sums can amass to hundreds of dollars, increasing the amount you owe in mortgage costs. For homeowners struggling to come up with the dollars to cover past due payments, late fees can create further strain. You can contact your mortgage lender to discuss the possibility of having one or all of your late fees waived. If you have a positive account history, some lenders may be willing to honor your request.
- Most lenders report your payment history to the three major credit bureaus. Each month your payment is late, creditors report the missed payment. Your credit score decreases significantly with each derogatory item on your credit report. This affects your ability to qualify for other personal loans, credit cards or lines of credit. Rebuilding your credit score after missing three months on your mortgage can take months, or years, to bring to a good standing.
- Foreclosure proceedings may begin after your payments are missed for 90 days. Foreclosure laws vary by state, but homeowners should be prepared to find immediate methods of covering their past due balances once payments are missed for three months. If the bank forecloses on your home, you will have difficulty qualifying for a new mortgage until the foreclosure no longer appears on your credit report. Foreclosures remain on your credit report for approximately seven years.
- Your lender will reach out to you to discuss your missed payments. If they are unable to reach you, you could receive multiple calls per day until a payment is received. Collector calls can create added stress as they are a constant reminder of your inability to pay. You should always communicate your financial circumstances with your lender. You can reduce, or stop, the number of calls you receive and learn about programs available for homeowners more than 30 days late on their mortgage payments.
