What Happens if You Miss a Mortgage Payment?

Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We earn a commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners.

No one ever intentionally goes out of their way to miss a loan or credit card payment — sometimes life happens and before you know it, the due date has come and gone and you’re stuck with late fee.

When it comes to missing a payment on your mortgage, however, the consequences can be far more serious depending on how long your bill is past due.

Below, select breaks down what happens when you miss a mortgage payment, and a few things you can do to ensure it never happens in the first place.

Subscribe to the Select Newsletter!

Our best selections in your inbox. Shopping recommendations that help upgrade your life, delivered weekly. Sign up here.

What happens if you miss a mortgage payment?

If it’s just a few days past the due date, you can still make a late payment without it negatively impacting your credit score. Mortgages will typically have a 15-day grace period for late payments, though it’s a good idea to double-check with your lender so you know exactly how much late fees are.

Once your payment is 30 days late — or you miss making it altogether — that’s the point where your credit score can be impacted. Your lender will have to report the late or missing payment to the credit bureaus, and as a result, your credit score could decrease.

Keep in mind that payment history makes up 35% of your credit score and accounts for whether or not you’re paying your monthly credit bills on time every single month. Since this is the most influential factor in its calculation, your credit score could take a serious hit if you miss a payment. Having a lower credit score can prevent you from taking advantage of the best interest rates the next time you need to apply for a loan or line of credit, so it’s important to maintain a healthy one.

If your payment is 45 days past due, the lender will assign a staff member to your loan account to help you learn more about your payment assistance options. By the time you hit the 60-day mark, you’ll incur another late fee and your credit score will likely take another hit since the lender will have to report this missing payment as well.

Once your mortgage payment is 90 days late, your lender will send you a notice that’s known as a demand letter. This essentially states that your payments are late and unless you start paying for the missing ones, the lender will have no option but to begin foreclosure proceedings.

Foreclosure is the process in which a lender seizes a property as a result of the homeowner failing to make their mortgage payments in a timely fashion. It can lead to a very significant drop in your credit score, further hurting your ability not only to be approved for certain credit and loan products but to receive favorable terms on those loans as well.

Beyond that, if you’re late on your mortgage payment by 120 days or more, the lender will schedule a foreclosure sale on your home and you will lose your property.

How to avoid missing a mortgage payment

bottom line

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.


Leave a Reply

%d bloggers like this: