When money is tight, it can be difficult for you to pay the mortgage each month. However, there are consequences for skipping payments, including foreclosure.
Realtor.com says that many lenders allow you to have a grace period if you cannot make a payment on the due date. However, you may incur late fees. These fees can quickly become burdensome if you are already struggling to pay the mortgage.
When will you face foreclosure?
You may worry about receiving a foreclosure notice as soon as you miss a payment. However, this is usually not the case. Your lender typically contacts you about 90 days after the missed payment. This serves as the official communication that the loan is in default. After this, you have to make the missed payment within 90 days. The bank can start the foreclosure process after this time period if you do not submit payment.
How do you work with the bank?
There are steps you can take to prevent the bank from foreclosing on your house. According to Money, you should speak to your lender as soon as you know that you cannot pay the mortgage. You will likely need to explain why you are experiencing financial difficulty and whether the situation is short-term or long-term. Also, lenders may ask for information documenting your financial situation, such as pay stubs or medical bills. Once a representative understands your circumstances, this professional can help you understand your options.
Depending on your situation, the solutions offered by a lender may not be feasible. You might need to consider other alternatives if you do not receive the help you need. We do not recommend putting your head in the sand and just waiting for a foreclosure. The longer you put off finding a solution, the more difficult it is to save your house.
Other solutions may include refinancing your home, selling the home, filing a Chapter 13 to rehabilitate the mortgage (whether the mortgage company likes it or not!), or defending the foreclosure action. This is when you should seek counsel from an attorney specializing in foreclosure defense and/or Chapter 13 so that you know ALL the options available to you before you choose a plan of action.