Skipping a mortgage payment isn’t ideal, but it happens for some homeowners from time to time. According to the Mortgage Bankers Association’s Research Institute for Housing America, 5% of American households failed to make a scheduled mortgage payment in the last quarter of 2021. If you have to cover an unexpected expense or if you’ve recently lost your job, you could find yourself in a financial squeeze that might have you considering skipping a mortgage payment.
Missing a mortgage payment can hurt your credit and could cause late fees to rack up. However, you won’t necessarily be at risk of an immediate foreclosure.
Here’s what to do if you skip a mortgage payment.
What are the consequences of missing a mortgage payment?
Your lender will typically report your missed mortgage payment to a credit bureau after about 30 days. If you’re only a couple of days late, there’s a chance the missed payment won’t have an impact on your score.
You will, however, likely be charged late fees. Plus you’ll have to repay your missed mortgage payment and your new mortgage payment once next month rolls around.
Will a skipped mortgage payment put my home in foreclosure?
One skipped mortgage payment won’t automatically put your home in foreclosure, but it could put you into dangerous territory. Missing even one mortgage payment can put you in breach of your mortgage contract. Laws on foreclosure vary among states but you don’t want to get in that situation.
What should I do if I miss a mortgage payment?
If you miss a mortgage payment, there are a couple of measures you can take to help alleviate the situation. Take a look at some of these tips.
Contact your lender immediately
It’s critical to reach out to your lender and let them know your situation. You may be able to work out a repayment program or agreement to avoid foreclosure or additional costs.
Look at budget and expenses
If you’re struggling to make your mortgage payments, it may be helpful to take a look at your monthly budget. Are you spending way more than you’re bringing in? Try to find ways to cut back on your spending. If possible, cut out unnecessary bills and put those funds towards your mortgage.
If you’re cash-strapped, consider looking into applying for a higher paying job or earning additional income on the side.
Look into mortgage relief programs
There are a number of options available for people struggling to make their mortgage payments. Consider looking into government-funded mortgage relief programs and assistance if you think you’re going to have challenges making your mortgage payments long term. Your lender may be able to offer you some resources, but you should also check online and on your local and state government websites.
Forbearance
Forbearance is when your mortgage servicer or lender allows you to pause or temporarily reduce your mortgage payments to allow you to build back your finances. One of the benefits to forbearance is that in many cases, you won’t be charged late fees or accrued interest. However, you will still have to repay any missed payments.
Forbearance may be available to people who have been either directly or indirectly financially affected due to the COVID-19 pandemic. If this is your situation, talk to your lender to discuss your forbearance options.
Payment deferral
Mortgage payment deferral is a post-forbearance option that helps you manage backed up mortgage payments. Deferral allows you to take payments you may have missed during your forbearance period, and set them aside to be paid at the end of your loan.
Consider selling your home
If all the above options fail, you’re still having difficulty finding another job, and your mortgage payments are simply too high to keep up with, you might want to consider selling. Selling your home may help you avoid the drawbacks of foreclosure. Look into options for downsizing, moving to a more affordable city, or renting for a period of time.
Start budgeting
When you’re struggling to make regular mortgage payments or pay other bills, you may benefit from budgeting. Start understanding where your money is going and how you can cut back.
Whenever you find yourself in a difficult financial situation, don’t ignore it. Take one or more of the steps mentioned above to address the problem.
FAQs
Can you skip a mortgage payment once a year?
Skipping a mortgage payment once a year won’t necessarily result in automatic foreclosure. But you will hurt your credit score and may rack up late fees.
Can you stop paying a mortgage after selling a house?
Yes. Once your house is sold, your mortgage is essentially paid off all at once.
If I make extra monthly mortgage payments, can I skip the next month’s payments and be fine?
Make sure to get in touch with your bank to discuss this scenario. They may put your extra funds toward your principal, in which case you may still have to make next month’s mortgage payment.
