Skipping a mortgage payment isn’t ideal, but it happens for some homeowners from time to time. According to one recent report, half of American homeowners and renters struggle to afford housing payments. 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.
While missing a mortgage payment can hurt your credit and cause late fees to rack up. You won’t necessarily be at risk of an immediate foreclosure.
So can you skip a mortgage payment without penalty? Here’s what to know.
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 either way, you don’t want to risk putting yourself in that situation.
Ideally, you should never risk skipping a mortgage payment if you can help it. If you’re short on cash, you may want to consider options for fast cash or picking up a side hustle. Sometimes, there may even be ways to increase your income at your current job. Consider taking on more hours, working towards a promotion, or increasing your skillset for better career opportunities.
If you’re having problems with debt, consider exploring debt relief solutions.
Recommended: How to Refinance Credit Card Debt in 5 Steps
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 key action items.
1. 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.
2. 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.
It may also be worthwhile exploring some budgeting strategies, such as cash stuffing or loud budgeting.
3. 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.
4. Mortgage forbearance
Mortgage forbearance is a temporary reduction or suspension of mortgage payments, usually granted by the lender when a borrower faces financial difficulties. Forbearance often requires the borrower to repay the missed amounts within a specified timeframe after the forbearance period ends. This can be done through a lump sum payment, additional monthly payments, or a loan modification. Interest typically continues to accrue during the forbearance period.
5. 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. On the other hand it may also be worthwhile to explore options for short-term emergency loans.
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.
