Being late for a couple of mortgage payments can be anxiety-inducing, especially if you’re struggling to pay your other bills. In addition to late fees, your lender may eventually take foreclosure actions, causing you to lose your home. Fortunately, there are ways to rectify the situation, including working with a bankruptcy and foreclosure attorney. Here’s what you need to know.
The Consequences of Missing Mortgage Payments
Before worrying about being late, keep in mind that lenders offer a 10 to 15 day grace period. If you cover your mortgage before then, the payment will still be considered on time. However, you’ll begin to incur late fees once the grace period has ended, which can be anywhere between 5% and 10% of your monthly payment.
Once you’re over a month late on your payments, your lender will send your account to the collection department. They will call or send you a letter to check-in and discuss working out a payment plan. If you continue to fall behind for over three months, the lender will take foreclosure actions, which could result in eviction.
What to Do If You Can’t Pay Your Mortgage
Fortunately, even if you haven’t covered your mortgage for 90 days, you still have options. By talking to your lender about a new payment plan and filing for bankruptcy, you can avoid losing your house. While Chapter 7 can help you stall the foreclosure process to buy extra time, Chapter 13 is often the better option. By filing for the latter, you can pay for the late fees and missed monthly payments over a longer period while keeping your home. However, you’ll still need to cover your regular monthly payments, as well.
Finally, keep in mind that late payments can lower your credit score by 60 to 110 points. Luckily, if you find ways to cover your payments moving forward, your score will go back up within a few months.
If you’re worried about losing your home due to falling behind on your mortgage, contact Greg Dunn, Bankruptcy and Debt Relief Attorney in Honolulu, HI. Serving Oahu, Attorney Dunn has over 25 years of experience as a foreclosure attorney and has worked on over 12,000 bankruptcy cases. His firm will fight for you to ensure you can keep your house. To learn more about this foreclosure attorney, visit the website or call (808) 524-4529.