Missing a Mortgage Payment: Getting Back on Track

By Karen Lawson
LoanPage.com Columnist

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A mortgage can have a term of thirty years or more. It's not unrealistic to expect occasional financial challenges over a period of years, but you've never missed a mortgage payment until now. You're embarrassed, but you need to contact your lender as soon as you know your mortgage payment will be late.

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Understanding Mortgage Default

Your mortgage loan is secured by your home. If you cannot pay for your home, the worst case scenario is foreclosure, which is the process by which your lender takes possession of your property and sells it to recover the balance of your mortgage and associated costs. Don't worry, your lender can work with you to help you repay your past due payment. The key here is "payment," and not "payments." If you wait to contact your lender once two payments are past due, there may be fewer options available, and you will have more difficulty catching up.

Getting Caught Up, and Avoiding Future Problems

Your mortgage company will appreciate your honesty, and any specific promise you can make to repay. This includes how much you can pay on a specific date or dates. Your lender may suggest these options:

» Repayment plan: If your situation is temporary, i.e., a one time major expense, you may be able to repay using a repayment plan. For example, for the following two months, you would pay one and a half payments to catch up. Your lender may ask you to sign a formal repayment agreement.
» Forbearance: If you have a one-time financial issue that can be resolved before your next mortgage payment is due, your lender will likely extend forbearance. You must repay the payment you missed, and the next payment due by the date agreed.

If you've experienced a change in financial circumstances, you may want to ask your lender about refinancing. You may be able to refinance to a mortgage with lower payments for an initial term. Although current interest rates are higher, your lender has many mortgage options available.

About the Author
Karen Lawson has more than fifteen years of experience in mortgage banking, and holds a Master's Degree in English from the University of Nevada, Reno.

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