How to Catch Up On Mortgage Payments After Falling Behind
What do you to in order to catch up on a mortgage payment? If you have fallen behind and have none of the usual options, such as an extension, mortgage refinancing, a deferral, a debt consolidation mortgage, etc., available to you?
And what to you do if you’re not allowed to make partial payments to catch up the payment? Or if you’re behind with other bills?
According to the Detroit News, mortgage debt is a different animal from what most people are used to, even in this age of rampant consumer debt.
Simply stated, if you default, the mortgage company can take your home and sell it to get its money and expenses back. Unlike credit card debt, which is unsecured, a default can start an expensive and relentless foreclosure process.
Here are a couple of important points to consider, especially for those Americans with adjustable-rate mortgage products:
- Most lenders allow 90 days before they pull the plug and “accelerate” your home loans, meaning they exercise the demand clause - demanding the payment of the outstanding loan balance.
- Most people don’t know that once they are late with one payment, any grace period goes away and all payments are due to the home mortgage company by the agreed-upon date, not 15 days later.
So, what to do when you’re late? Pay the mortgage. Plain and simple. Make it your first and only proiority. Get your mortgage on schedule before things get worse. Contact your mortgage lender and work something out.
Set yourself up with a repayment plan that would allow you to make current home mortgage payments while paying a portion of the missed payment each month for a specified period.
You might also qualify for forbearance, in which your mortgage lender would suspend payment for a temporary loss of income due to illness or injury or other such reason for missing the home loan payment.
Skip other bills if you have to. It’s not ideal to do this by any means, but given the circumstances and the travails involved in defaulting, you may have to hold off on other payments for the time being.
Pay what you owe to get your mortgage up to speed, and be sure to let your other creditors know that you are going through a financial hardship and will be missing or making smaller payments, and will address the matters when you can.
If you simply can’t afford to stay in your home, consider selling it and asking your mortgage provider to hold default proceedings until you do. A similar option is to ask for a deed in lieu of foreclosure, meaning you surrender your home to the bank and avoid foreclosure proceedings.
However, bear in mind that if your property does not sell for enough to cover the balance of your mortgage loan, you will be responsible for the difference. You could also file for bankruptcy, though that should be the absolute last resort.