Although missing a few mortgage payments is likely to put your home at risk for foreclosure, it doesn’t mean you’re entirely out of options. First, you need to avoid panicking. There is a strong possibility that if you’re asking yourself, “How many mortgage payments can I miss before foreclosure?” your home is not yet in foreclosure, and it’s not too late to save it.
If you act now, you’ll have plenty of options, and this blog is an excellent resource to help you get started and stay on the right track.
What Happens When You Miss One or More Mortgage Payments?
Missing mortgage payments is a cause for concern. However, it does not mean that your home will immediately be foreclosed. The foreclosure process follows a timeline and grants homeowners several opportunities to save their homes.
First Missed Payment – Grace Period
Most lenders allow borrowers a grace period of about 15 days. During this time, borrowers can make the missed payment without impacting the status of their mortgage or affecting their credit score. You must make a payment during this time to avoid incurring late fees, and your credit score may suffer.
Second Missed Payment – Mortgage Default
Missing a second payment will put your mortgage in default. This complicates the situation and may result in your lender repeatedly contacting you by phone or mail.
At this stage, it’s best to communicate with your lender and explain what’s causing your missed payments. Foreclosure costs lenders significant time, money, and resources. Therefore they are inclined to avoid it when possible. Talk to your lender to explore your options. You may be surprised at how they can help.
Third Missed Payment – Preforeclosure
The situation becomes more grave as time passes and more mortgage payments are missed. If you do not reach an agreement with your lender by your third missed payment (typically within 90 days), you will receive a notice in the mail allotting you 30 more days to rectify your account. To save your home at this stage, lenders generally require you to pay the total missed payment amount, but you shouldn’t rule out the possibility of negotiating an alternative solution.
Fourth Missed Payment – Foreclosure
If you do not reach an agreement with the lender or make the delinquent payments by the end of the final 30-day period, foreclosure will begin.
At this point, lenders will schedule an auction date and publish the details in local news sources. Even at this stage, you may be able to save your home by submitting a loss mitigation application.
How Can I Avoid Foreclosure?
Saving your home and your credit is not impossible. Working with your lender will give you several options, some of which may even allow you to keep your home.
Contact your lender to inquire about the following options:
- Reinstatement – takes place when the borrower pays the missed mortgage payments, interest, and any late fees in a lump sum. Afterward, regular monthly payments resume and the home is safe from foreclosure.
- Forbearance – allows borrowers and lenders to set a period of reduced or suspended mortgage payments. This option is most helpful to those unable to make payments due to financial difficulties resulting from loss of income, medical emergencies, or other unforeseen circumstances.
- Refinancing – offers a long-term solution by replacing your current mortgage with a new one. The new mortgage can lower your monthly payments by reducing your interest rate or increasing your loan term.
- Modification – alters your original loan to terms better suited for your current financial standings. The modifications may include adjusting the loan term, lowering the interest rate, or switching from an adjustable to a fixed-rate mortgage.
What If I Can’t Reach an Agreement With My Lender?
Depending on your situation, continuing to live in your home may not be an option. However, saving your credit may still be possible with these methods:
- Make a short sale
- Sell your home to a real estate investor for cash
- Temporarily rent your house to continue making mortgage payments
Save Your Home With a Little Help From Renewed Homes
If you’ve fallen behind on your mortgage payments, you must act quickly to save your home. Renewed Homes can help you catch up on missed payments and avoid foreclosure.
Our process is simple. We can pay your reinstatement fee on your behalf within 24 hours of contacting us. Which will catch up your mortgage and allow you to stay in your home!
Don’t face foreclosure on your own, and let us help! Contact our team today to keep your home and save your credit.