What Happens If You Miss Mortgage Payments?

Missing a single mortgage payment isn’t usually the end of the world - however, you can still experience negative consequences. If you’re struggling to keep up with your mortgage lender, be sure to communicate with them - they may be able to arrange a new payment plan. 

You’ll be given a grace period, which usually lasts between a week to two weeks after the payment is due. During this time, you’ll be expected to repay any outstanding debt. 

If you fail to pay your mortgage regularly and are often in arrears, then your lender will report this to the credit bureaus. This can impact your credit rating and show up on your credit score, potentially impacting further credit applications. A bad credit report could also impact your ability to rent in the future. 

Being 90 days or more behind on your mortgage will mean that you’ve defaulted on the loan. If you reach this stage, you should prepare for repossession actions. This can mean you’ll be evicted from your home. 

Missing mortgage payments can also lead to court action. However, these are last resorts - your lender ultimately wants the money, and will usually support you and find a solution that means they get the money owed. After all, they want the payments to continue.

Tips To Avoid Missing Mortgage Payments

There are some actions you can take that can minimise the risk of missing mortgage payments. Read on for some of the best ways you can avoid missing mortgage payments, or what to do in the instance that you can’t meet a mortgage payment.

Communicate With Your Lender

One of the most important things you can do to avoid missing payments and experiencing negative repercussions is to speak to your lender about the situation. 

Typically, they’ll respond to you within two weeks of a missed payment, but it’s usually best to speak to them beforehand. 

Most lenders will have specialist support teams to support you in the event that you’ve lost your job, somebody has died, or you’re experiencing an illness - or something unexpected has occurred. Your lender will outline your options and support you.

Budget

Before discussing your mortgage with your lender, calculate how much you can afford to pay per month for your mortgage, and budget accordingly. 

There are many budgeting tools online that can help you determine how much to spend on luxuries, food, and more, whilst factoring in essential bills. 

In some cases, you may have to cut back on spending money on luxuries or cancel direct debits and regular payments that aren’t essential - for example, TV subscriptions or music streaming subscriptions.

Check If You’re Eligible For Benefits

If you’ve lost your job or you’re currently unemployed, you may be entitled to benefits that can contribute towards your mortgage payments. 

When applying for benefits, you’ll need to include information about income, savings, as well as existing benefits.

Have Insurance In Place

One of the best ways to avoid missing mortgage payments and other household bills is to have the right insurance in place. 

Whether you choose income protection insurance or a critical illness plan, having the right insurance plan can take a weight off your shoulders in the instance that the unexpected happens. 

With critical illness cover, you’ll be given a lump sum or a regular income if you are diagnosed with a critical illness that meets the insurance policy. This can not only go towards paying your mortgage payments, but also contribute to medical costs. 

At LTC Mortgages, we can source the right insurance that meets your requirements. Check out our insurance page or contact one of our friendly advisers by calling 0151 662 0188 today.