Mortgage Default 101: What Happens When You Can’t Pay?

Mortgage Default 101: What Happens When You Can’t Pay?

When you miss a mortgage payment, that means you just had a mortgage default. Seeing as lenders expect you to pay on time and as promised, you get penalised and pay a fee when you miss a payment. The only way to remedy this is to ensure you don’t miss a payment and continue paying on time in the future. However, if you always miss your payments, you may end up in huge trouble with your mortgage brokers.

Fortunately, you have different options, and you can always speak to your lender to help you find better solutions to help you with your financial situation. With this, you’ll get to be able to create a workable course of action and get back on track with your payments again.

What Should I Do If I Miss a Mortgage Payment?

The first thing you should do when you miss a mortgage payment is to pay it. This is the best place to start and usually the only way to get the situation under control. If you can’t pay it, then things can get complicated, and you may find yourself in a huge mess.

However, if you just miss a payment, it is good to try and pay it. That way, you’re paying on time, and you are fulfilling your obligation. It will also show you are serious about getting back on track with your payments and being a responsible borrower.

Also, make sure you contact the company with which you have the mortgage and let them know that you have missed a payment. They’ll let you know what you have to do to pay it, whether it is going through their preferred payment method or their website and choose the best time for you to make the payment or arrange a direct debit for you.

What Should I Do If I’m Struggling to Pay My Monthly Payments?

  • Make a New Payment Arrangement: The first thing you should do is to speak to the lender and find out how you can make your monthly payments easier for you. They may ask you to make another smaller payment for a few months or simply reduce your monthly payments if it is due to hardship, job change, or another emergency.
  • Speak to Your Mortgage Broker: If you have tried to speak to the lender to find a new repayment plan and they won’t do it, it might be time to look at the alternatives. You can look at changing your mortgage term or even finding a new lender.
  • Create a Statement of Financial Position: When you create a Statement of Financial Position, a new payment arrangement or look at changing your mortgage term, it is important that you put the terms of your mortgage into writing. This will help you and your lender remember the terms when you reach the agreement.

The Bottom Line: Connect with a Credible Mortgage Broker to Help You Choose the Best Mortgage Deal for You

Mortgage brokers can help you with all aspects of your mortgage, from finding the best deal, making a new repayment plan if you’re struggling to pay and even help you find a new lender if the one you are currently with won’t help you.

How Can We Help You?

All of the Finance Managers at FinanceCorp are fully qualified, trained, and experienced mortgage professionals who live and breathe finance. If you’re looking for a mortgage broker in Cockburn Central WA to help you choose the best loan option when buying a house, we’re the best ones to call. Get in touch with us at 08 9417 5550 to see how we can help get you behind the wheel of your dream vehicle!