What Happens if you Miss your Mortgage Repayments
If you’ve just bought your own home and you’re finding it difficult to pay your bills, paying your mortgage on time can become a big worry. It’s likely you’ve tried everything you can to get your finances in order, but skipping a mortgage payment is extremely serious. Missing a payment is a default against your loan. This can ultimately affect your credit score and even lead to your home being repossessed. If you’re struggling to keep up with your mortgage repayments it’s important to act quickly and not shy away from the problem. Many people are struggling financially due to the economic climate and so your situation is not unique! It’s important to make sure you fully understand the consequences of defaulting on your mortgage repayments, and what you can do to help your situation. Firstly, missing a payment on your mortgage is most likely going to incur a fee. Exactly how much you’ll have to pay is dependent on your provider and your mortgage rates, but be aware that it could be extremely costly! Defaulting on your loan won’t only end up costing you in late fees. Default-related fees are also likely to crop up from your mortgage provider. You may be charged for your provider to come to inspect the property, to make sure that you’re tending to it and – in some cases – you may be charged default-related fees to cover foreclosure costs. These fees are often a lot more expensive than your late fees, and so can end up costing you more than you’d originally planned for, leaving you in yet more debt. Every mortgage repayment you miss is going to have a negative effect on your credit score. This could, in turn, affect the price you’re paying for insurance companies and other services. With a bad credit score you might find it difficult to be accepted for a mortgage in the future, should you ever re-apply. To make sure you avoid the excess costs and stress of defaulting on your mortgage it’s important that you budget properly and efficiently. Make sure you keep a record of exactly how much you pay and when you pay it. If you’re struggling financially then you should be budgeting your day-to-day life to ensure you’re not over-spending. Prioritise your mortgage repayments if it’s possible, it’s easy for debt to mount up if you don’t keep on top of payments. Your mortgage provider should give you some time to make a payment should you miss it. How long a grace period you get is dependent on the provider, so don’t panic too much if you miss a repayment by a day or two. If you do miss a payment but are quickly able to rectify the situation make sure you let your mortgage provider know as soon as possible to avoid later stresses. When it comes to fees that appear mysteriously, make sure you chase up exactly where they’ve come from. In some cases you may be incorrectly charged late fees – if this has happened to you it’s best to sort it out as early as possible. If you feel as though there’s been any issues regarding you mortgage payments and charges make sure you’re communicating regularly with your provider. This will go in your favour when it comes to rectifying mistakes!