Defaulting On Your Mortgage Loan Payment

due date of mortgage payment on calendar

Renting can be fun for only a short amount of time. The constant moving from one place to another will, at some point, become a boring exercise. If you are at this point in your life, then you should consider buying your own home.

Now, when it comes to buying a home, the first thing that people typically consider is how much they can afford based on how much they are currently earning. If it is not enough, the first option is to get in touch with a mortgage company. You apply for a loan, you get approved, and then you get your dream home. Wait, what happens when you do not have enough money to make the repayment?

I Missed A Payment! Help!

If you have read your loan agreement thoroughly, then you would know that delayed payment can result in interest and penalty fees. A penalty, or a late fee, is typically applied during the 16th to 30th day, starting on the due date. At this point, you would probably get a lot of phone calls, emails, and even messages from a mortgage company in Boston, Massachusetts.

Past the 30th day, your account will be reported to credit bureaus if you still have not made any repayments. This can be quite disconcerting, as this might affect any loan application you will have in the future. Keep in mind that Boston adheres to the Massachusetts Consumer Protection Act. This means that mortgage lenders will now see you as a risk for reneging on payments and will provide you with a lower amount.

the cost of buying a home

A Legal Nightmare

Being unable to pay your mortgage is a legal nightmare. Once your account is past the 120th-day mark, the process of foreclosing your property begins. During a foreclosure, you can be evicted with the mortgage lender taking control of your home. They will initiate the process of selling the property to cover the remaining amount that you were not able to settle. Keep in mind that, at this point, you are not yet free. If the proceeds from your property are not enough to cover the unsettled amount, you are still legally bound to making the payment. This, in itself, typically leads to more legal proceedings.

Turning the Problem Around

No need to fret, though. There are legally accepted ways on how you can ease up on the payment. For example, you can talk to your mortgage lender and see if they can modify your current loan payment agreement. Often, the lender can lower the monthly payment while lengthening the time you need to make the repayment.

If you have just forgotten to make the payment for a few months, you can have this corrected by requesting to pay a higher monthly payment until such time that you have caught up on your payments again. Some mortgage companies also allow a sort of deed-in-lieu foreclosure agreement. In this type of arrangement, you hand over the title to the lender to get a certain portion of your loan be written off.

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