Mortgage payments

As the rate of unemployment continues to climb, a growing number of people are actively looking for methods to reduce their monthly expenses and save money. For those who have a mortgage on their heads, there is a high possibility that you may find yourself in a situation where your funds are dry and you’re not able to pay for your mortgage.

It is important to remember that falling behind on your mortgage payments can have a far more significant impact on your credit score than failing to pay your rent on time. In the worst-case scenario, it could put your house at risk.

Nonetheless, there’s always a way out of such situations and this article will take you through the various consequences you may have to face as well as the options available to help you sail past the storm.

Let’s get right down to business.

What Are the Consequences of Falling Behind on Mortgage Payment?

After the first 15 days have gone and you still haven’t been able to make your payment, they’ll charge a late fee.
After 30 days if you are still unable to make the payment on your loan, it is considered a default.

When this happens, your lender will notify the credit bureaus that you have gone way past your due dates and your credit score will tumble.

There are some situations where you may go past the 120-day late mark on your mortgage payments, which would then begin the foreclosure process. After that, there will be a long legal battle where the lender will take control of your house and you will be forced to leave the property.

The mortgage lender’s intention is to sell the home and use the money to pay off the remaining sum on your mortgage.

What Are The Stages Leading To The Foreclosure Process?

Delaying payment on your mortgage can often lead to foreclosure, which can be a long and difficult process. Foreclosures only occur once you’ve missed mortgage payments for more than 120 days. Your creditor will investigate other possible methods of payment before beginning the foreclosure process.

Typically these are the stages leading up to the foreclosure:

Grace Period

Your mortgage is not considered late until 15 days have passed from the original due date. This time frame is referred to as the grace period by lenders.

Letter with Late Fee

At this stage, your lender will send you a letter. In the letter, they will specify the amount due, the date of payment, and the late fees.


At this stage, your lender will submit a “notice of default” to the county’s office. Depending on who is in charge of servicing your loan, this term might extend anywhere from 30-120 days. You still have a chance to sort things out with your lender during this period by negotiating a revised repayment plan or any other amicable solution.


If you have surpassed more than 3 months, the lender will proceed with the foreclosure process on the property. You will be forced out of your house, and it will be sold either through a real estate company or will be auctioned.

Also read: Reasons For Refusal Of Mortgage Pre-Approval

What options are available to you if you want to avoid foreclosure?

Lenders are aware that many people are going through difficult times right now, and they want to help those who ask for it.

If you’re feeling overwhelmed by the pressure of making decisions about your home, don’t worry- there are options available to you. You can always get in touch with your lender if things start to escalate, but there are typically some alternatives that they will offer you before it gets to that point. Here are some of the most common options:


The lender will give you a new loan to cover up for the delayed payments in addition to what you owe on the property. This new loan will come with a different interest rate and the terms and conditions will also be different. With this option, your credit score will not dip, and will help you ease off your monthly payments a bit.


This is an option in which you and your lender mutually devise a strategy that is suitable for your financial situation and enables you to start making payments. You will strive towards continuing to make payments as well as making up for the late fees over time.


In this option, the mortgage company agrees to halt your mortgage payments for a while temporarily. The delayed payments will be added to the end of your loan.


Loan Modification

The mortgage company will change the terms and conditions of your existing loan. This includes the amount owed, the interest rate, and the duration of the loan. It’ll help you reduce the premium amount you are going to pay the lender each month.

Sale of the Home

Selling your home may be the best financial option if it is worth more than you owe on it. In today’s market, a home in good condition can sell quickly. Just remember that missing mortgage payments during the sale process can damage your credit score. If possible, try to keep up with your payments while you sell your home.


If you can work out an arrangement to live with friends or family at little to no cost, renting out your home could be a good option as long as you can collect enough rent to cover your mortgage payments. Just keep a few things in mind before becoming a landlord:

  • You’ll typically pay increased property insurance costs on the property.
  • You’ll be financially responsible for home maintenance and repairs.
  • You’ll need to arrange to repay any mortgage payments you miss while setting up the rental.

Short Sale

If you’re having trouble selling your home, you may be able to do a short sale. In a short sale, the lender agrees to let you sell your home for less than what you owe on the mortgage. Even though it will lower your credit score, a short sale is better for your credit than a foreclosure. And in some states, you may even be able to avoid paying a deficiency judgment (a penalty that lenders can sometimes get when the value of the collateral on a loan is less than the amount of the debt).

Deed in Lieu of Foreclosure

If you agree to a deed in lieu of foreclosure, you are essentially agreeing to vacate the home and give the keys back to the mortgage lender. This is often seen as a more positive outcome than foreclosure, as it can be less costly and time-consuming. Additionally, some mortgage lenders may offer a “cash for keys” arrangement, where you are given money to help pay for a new place to live.

While a deed in lieu of foreclosure does have some negative consequences for your credit score, they are typically not as severe as those associated with foreclosure.

How do prevent yourself from falling behind?

You can look for a way to increase your income or get a second job. While working a temporary job, you can stay in your home and can avoid falling behind if you have a money issue. You might wanna think about a roommate as an option, according to your situation.
It’ll also discover a strategy to increase your income. You have to be ready to buy a home. It involves:
1. Try saving up for a large down payment. This will give you equity on your home from day one. You can also prevent from owing more than your home is currently worth later on the line.
2. Pay off bills. Pay your credit cards, student loans, and other debts to free up your income and manage your house payment.
3. Only buy a home that you can afford. Before securing a mortgage, play with numbers and figure out if you can afford it.


When you’re behind on the mortgage payments the experience is never pleasant. Loan Modification will only be the last resort in case of dire emergencies.

At times there are some lenders that may force you to evacuate your house. This will impact your credit score, and at times, few will do both. If you are in survival mode, you can try to reduce collateral damage and help you get back on track.

Irrespective of how bad your financial outlook may be, there are various solutions. Finding solutions proactively can help you avoid foreclosure or bankruptcy.

When you feel like you’ve no other option left, we have the solution. Elite Properties purchase properties in as-is condition and can save you. We will help you avoid foreclosure and assist in your future.

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