Despite your good intentions, with the sharp rise in current interest rates and the recession looming on the horizon, it is possible that you will be unable to make one or two mortgage payments within the prescribed time limits.

So, what happens if you miss a mortgage payment? The answer is in the article below!

*Note that this article is not legal advice and does not present all of the options available to you in an exhaustive manner.

Some tips to avoid the situation from escalating

Being aware of what can happen in the event of a mortgage payment default can be very useful... and there are several actions to take before considering losing your home to your creditors. First and foremost, it is crucial to quickly consult with your mortgage broker or any other professional so that they can help you manage this situation.

So, if you have failed to make your mortgage payment for at least two months, your lender will send you a 60-day notice. Of course, lenders and insurers prefer not to initiate this process. These days, it is not uncommon to see deadlines around 12 months before this process begins.

If you immediately recognize that you have missed a mortgage payment, call your lender right away to inform them. Ask them how you can remedy the situation. Since the vast majority of lenders are willing to collaborate with borrowers, it is important that you take quick action to address the situation. This will prevent the lender from initiating legal proceedings.

What exactly is a 60-day notice?

In fact, the 60-day notice is the first step towards obtaining a payment judgment or legal control of your property by the court. If one of these judgments is approved, the lender will unfortunately sell the property and dispose of the proceeds of the sale as they see fit.

And how can you avoid receiving this 60-day notice?

In general, lenders are quite flexible and willing to collaborate with a homeowner whose payments are behind. The reason? The process of selling a property in mortgage default can take a long time, especially in these times of real estate contraction. A lender's primary mission is to lend money, and they certainly don't want to take on the role of owner!

By contacting us, for example, you could refinance your property with another lender and repay your original mortgage. In some cases, you might even be able to get a second mortgage to pay off the first. Keep in mind that a new mortgage can also significantly reduce your monthly payments with the help of a longer amortization.

You could also make the painful decision to sell your home just before the lender initiates legal proceedings. In this way, you would repay your mortgage in full and avoid the consequences of a default.

As you can see, if you contact your broker quickly, you have a chance to avoid serious trouble. And who knows, maybe he will offer you the opportunity to improve your situation.

Notice: 

Finally, it is important to note that mortgage laws vary greatly from country to country and from region to region. It is therefore always advisable to consult a competent professional before making an important decision. This article is in no way legal advice and does not replace consultation with a lawyer or mortgage expert.