You might have gotten worried when you had a late mortgage payment. However, you shouldn’t bother yourself if you are still within the grace period. You won’t have to pay penalty charges or late fees if you make a payment within 15 days beyond the mortgage payment due date. However, payment after the 15 days grace period attracts late fees.
What happens if you cannot pay your mortgage?
You may have wondered what the consequence of a missed home loan repayment will be. After 30 days beyond the due date, the mortgage company will report your inability to pay the mortgage to the credit bureau. Then, mortgage servicers will discuss loss mitigation options like a mortgage modification, refinancing, and forbearance. You have to choose any of the options to avoid losing your home.
Another late fee awaits you if the payment is still late after 60 days. A fraction of the monthly payment you suppose to pay is the late fee. The extra payment increases the cost of the loan. You may start receiving foreclosure warnings when it is 90 days late. The proceedings for the repossession of your home may begin by the 120th day.
The late payment report will harm your credit score. It can cause a 50 to 100 points dip. The score drops each time you make a mortgage payment 30 days beyond the due date. The drop will be worse if it is over 60 days late. Despite the negative impact on your credit score, you can get no credit check loans .Your lender won’t have to review your credit score or credit history.
What is the grace period?
When you cannot pay your mortgage, your lender can give you some days to make the payment without penalty charges. Usually, most mortgage companies give 15 days, approximately two weeks, beyond the loan due date. As a result, you have more time to cover your mortgage. You can check your mortgage documents for the length of your grace period.
How you can handle a late mortgage payment
You have to protect your home, credit score, and finances once you find out that you can’t pay your monthly mortgage. Also, you can explore the available options to minimize the damage to your credit score and penalty fees.
- Refinancing: It would be best to take a new mortgage with affordable monthly payments. Missed payments on your credit report can prevent you from getting approval for a new mortgage. Fortunately, you may get no credit check loans from some lenders.
- Forbearance: You can request your lender to suspend your mortgage payments for some months. However, you will pay a lump sum for the accumulated payments during the suspension period. Also, you can create a repayment plan.
- Loan modification: You can request your lender to adjust the terms of your monthly mortgage payments. This approach can lower the monthly payments but extend the loan period.
Is it possible to get a mortgage with a credit report marred by late payments?
It may be difficult to get a new mortgage if you already have late payments against your name. However, you can get no credit check loans from some lenders. You may find a mortgage lender who will approve your loan if you have a good deposit.
