What Happens If You Miss A Mortgage Payment?

6 Min Read
Updated July 12, 2022
Written By
Scott Steinberg
Front porch during the holiday season.

What happens if you miss a mortgage payment? Eventually, it could damage your credit score or lead to the loss of your home. For those asking what happens if you don’t pay the mortgage, or who may have a missed mortgage payment, it may not have to get to that point if you take proactive steps to work with your lender to address these hiccups.

Be advised that when it comes to homeownership or your credit rating, a missed payment doesn’t have to be a permanent hinderance. As long as you work diligently with your lender, you won’t need to find yourself asking questions like, “How many mortgage payments can you miss?,” or “How many missed payments can you have before foreclosure?”

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What Happens If I Make A Late Mortgage Payment?

Most home loan and mortgage contracts include a grace period for late payments, which often provides a roughly 2-week period in which late payments can be made without penalty. However, these agreements will generally also note that servicing fees (including late payment penalties) may be charged to you after this grace period ends. It’s common to make late payments during the grace period. But for purposes of maintaining good budgeting and finance habits, it’s best not to get in the regular habit of cutting payment dates close.

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What Happens If You Miss A Mortgage Payment?

If you miss a mortgage payment entirely and do not pay invoices during the grace period, it can lead to further action.

After The First Missed Mortgage Payment

Following your first missed mortgage payment, your loan provider will typically report the missed payment to credit bureaus after it is 30 days late. This can have a negative impact on your credit score. While your mortgage provider won’t start foreclosure proceedings until 120 days have passed, do note: If a month has passed without payment, you can expect that they’ll be reaching out to you in hopes of getting the issue resolved.

After The Second Missed Payment

As above, in most cases, lenders won’t report late payments to credit reporting agencies until these payments are at least a month late. However, if you miss a second payment, you will face a second reporting to credit agencies and a second round of late fees. These reports will lead to ongoing negative consequences for a homeowner’s credit score as each missed payment is reported to credit bureaus.

Again, by now, your lender will probably try to contact you in writing about the consequences of defaulting on the mortgage.

After The Third Missed Payment

Following three missed payments, you may receive a notice of preforeclosure. At this point, you face the possibility of staring down foreclosure proceedings (if you live in a mortgage state) or a non-judicial foreclosure (if you live in a deed of trust state). Note that you won’t just receive a demand letter or notice to accelerate (which lets you know that you need to get current on mortgage payments or face foreclosure). Your mortgage provider will also let credit bureaus know about the third late payment − which will cause a further dip in your credit score.

How Many Missed Payments Before Foreclosure?

Depending on the laws in your sate and your lender’s individual policies, borrowers who are delinquent on payments may get through the first 3 months of non-payment without suffering permanent damage to their credit score or homeownership. Following 120 days of non-payment, lenders are likely to bring foreclosure proceedings against you.

After The Fourth Missed Mortgage Payment and Into Foreclosure

Borrowers in the unfortunate situation of getting this far behind on mortgage payments may find themselves served with legal papers. These papers are a preface to lenders going to court to take title to the property so that they can sell it off and reclaim their losses. Note that things don’t have to go this far if you are willing to negotiate and work with your lender in good faith to get late payments resolved. In fact, there are several ways to stop foreclosure that you may wish to consider (especially as, in the event of foreclosure, you may find yourself liable for attorneys’ fees as well).

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What Should I Do if My Payment Will Be Late Or Missed?

If your payment will be late or missed, don’t panic. Just by following a few simple guidelines, you can take meaningful steps toward alleviating financial-related stress.

Contact Your Lender

In the event that you find yourself forced to miss a payment, contact your lender immediately. Mortgage providers are just as eager to get paid as you are to pay them in a timely fashion. That means they’re generally incentivized to work with you to come up with a payment plan that can help get you caught up on your loan.

Ask For A Forbearance

Wondering what a forbearance is? Put simply, it’s an agreement between you and your home mortgage lender to delay foreclosure proceedings. Given the time, effort, and expensive legal fees involved in foreclosing on a home, lenders are often eager to work with borrowers to find practical solutions when financial problems arise.

Devise A Repayment Plan

As part of working with your lender, you’ll come up with a repayment plan or a mortgage deferment, which is another alternative that may be available to borrowers.

Stick To The Plan

Once you’ve come up with a repayment plan, it’s critical to stick to it, and not fall behind on mortgage payments once again. Remember: Your lender wants to see you succeed and become financially solvent − but it’s also important to show them that you’re working hard to meet your obligations in good faith as well.

The Bottom Line: Work Through Missed Mortgage Payments With Your Lender

Ultimately, the longer missed mortgage payments go unpaid, the bigger the problems that ensue, and the more damage it can do to your credit history and credit score. But remember: Oftentimes, regaining compliance with home loan terms doesn’t have to be as difficult as it seems when you make a point to actively work with your lender to create a plan that can help you get back up to speed.

In the event that you may be late on or miss a payment, contact your lender as soon as you become aware of the problem. With a little open and honest conversation, you may be surprised at just how quickly a solution can present itself. If you’re having trouble meeting your financial obligations, don’t forget either: You can learn more about refinancing and how it can help you lower your monthly mortgage payment in our Learning Center.

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