13 Dec What are the consequences of missing a mortgage payment?
When you ask for a mortgage, you are really telling the lender you will make every payment on time and in full at each billing period, whether it is a monthly, semi-monthly, accelerated bi-weekly or weekly payment. If you don’t make these payments, there are some serious consequences you must face.
So, exactly what happens if you miss a payment, or even two?
That all depends on whether or not you end up making up for that missed payment, and how much time elapsed between the payment due date and when the payment was actually made. But if you miss a payment altogether and never end up paying it at all, the repercussions will be more serious.
It could just be that many homeowners might find themselves in a situation where they either don’t have the funds to make a mortgage payment one month or simply forget to make a payment. Unfortunately, such an oversight could have a negative impact on your finances and credit score.
If you miss just one mortgage payment, the following month’s mortgage payment will then be considered late. Why? Because that next payment will be considered the missed payment that you’re making up for, which means you’ll be playing catch-up. And if you fail to make that extra payment to make up for the one you missed, you’ll be considered late with every monthly payment going forward. There is also the fact that late payments are typically charged a late fee. If every subsequent payment you make is considered late, you’ll constantly be paying additional funds to cover these penalty fees. For the majority of mortgages in Canada, you’ll have a 15-day grace period, which means your lender probably won’t charge you a late fee until after the 15 days have elapsed. The actual late fee that you would be charged depends on your lender and will be detailed in your mortgage contract.
To avoid these extra fees, try to keep up with your mortgage payments. We can assist you if you have any questions.