Most of the time, we focus in these posts on what you need to know about applying for a mortgage. But you probably also have questions about what happens after you sign on a home loan, including what to expect if you happen to miss a payment.

What Happens if You Miss a Mortgage Payment?

Within Your Grace Period

The consequences of missing a mortgage payment depend in large part on how long it will be before you are able to make the payment and get current on your home loan. They also depend on the lender’s specific policy on late payments.

It is not uncommon to miss a mortgage payment and figure it out a couple days later. It could happen either because you forgot, or because there was a delay of some sort that you could not control with the payment method you selected.

If that happens, lenders usually are not going to penalize you for it, especially if it does not happen all that often.

In fact, your grace period may extend longer than you might expect. About 15 days is typical. But because there are variations, you need to check the late payment policy set by your lender to be sure.

Outside of Your Grace Period

If the grace period comes and goes and you still have not made the mortgage payment, then there will be a penalty. You can expect it to range between 3% and 6% of your monthly mortgage amount in most cases.

Each time you fail to pay your mortgage on time, it is also possible that your lender will report it. If that happens, your credit score may decline.

This might happen in or out of the grace period, depending on the lender’s decisions with respect to reporting.

When Does the Foreclosure Process Begin?

When the grace period passes, the lender cannot immediately begin foreclosure proceedings. Usually, you have three to six months to get current before foreclosure proceedings commence. Once again, the time frame depends on the lender.

What Should You Do If You Think You May Miss a Payment?

If you are worried that you will miss a payment, get in touch with your lender right away. By doing so, you may be able to prevent a hit to your credit score by requesting that the lender not report the missed payment.

The lender is most likely to honor this request if you usually pay on time.

In some cases, if you are on very good terms with the lender, you might also be able to request that late fees be waived if you expect to pay a couple days after the grace period has ended.

Most importantly, you will be communicating with your lender and reassuring them of your good intentions. Keeping the lines of communication open can help to protect and strengthen your relationship with your lender.

What Should You Do If You Cannot Keep Up?

Hopefully, if you miss a mortgage payment at some point in the future, it will be a one-off, and not a symptom of a bigger financial problem.

But if you do find yourself persistently struggling to keep up with your payments, there are a few different options.

You can start out by asking your lender about forbearance. Another idea is to apply for a mortgage relief program.

Refinancing might also be what you need to do to get current and stay current with your mortgage payments. Extending your loan term can reduce your monthly mortgage amount.

We Can Answer Your Mortgage Payment Questions

If you have any additional questions about making mortgage payments, Grandview Lending can answer them.

When you apply for a mortgage, we will discuss your finances in-depth and help you choose a mortgage product that you will be able to afford now and over the years ahead.

Please call (317) 255-0062 to schedule your consultation.