What To Do If You Cannot Pay Your Mortgage?

Underpayments, Deliberate and Accidental

Looking at a mortgage agreement – and specifically the payment schedule that is involved in one – is often enough to put even the calmest of individuals into something of a panic. When you stop and think about it, the idea that you are going to pay x amount every month, three hundred times over the course of 25 years seems astonishing. How many of us were doing the same thing twenty-five years ago that we are today? Some of us were not even born. And by the time twenty five years are up, what age will we be? Can we realistically imagine that for the next twenty five years we will be doing the same thing, living in the same place, paying to the same mortgage?

Of course, in many cases we will not be paying the same mortgage. Many individuals and families move house semi-regularly for work reasons, to emigrate or to be closer to extended family. Whatever the reason for moving, this generally results in selling up the current home, paying off the mortgage on it in full, and taking out a new mortgage on a new home elsewhere. For those of us who stick with the same house and the 300-month plan, however, the situation can certainly seem quite daunting. How, one asks oneself, can I possibly keep to an arrangement that goes on for so long? This is why mortgage payments are calculated to generally be set at a level which the customer can comfortably manage. Even if they have a few months of financial stricture, normally savings or help from one’s family can keep things ticking over.

For some people, however, it becomes a case of simply not being able to maintain the payments in the short term. Families will help up to a point, but cash and goodwill are only ever in plentiful supply when they do not have to be frequently relied upon. In such cases, it is often possible to make an underpayment to your mortgage – at least as long as you tell your lender that you are going to do it. Getting in contact with your mortgage lender when it appears more likely than not that you will be unable to meet the agreed monthly payment means that they can put arrangements in place to collect the reduced monthly amount. For a period of a few months, this can make a big difference.

Underpaying a mortgage payment either accidentally or carelessly without regard for the consequences, however, brings different challenges to the table. In the case of an non-agreed underpayment, you will incur a fee on the mortgage which will increase the balance and make for a tougher time paying things off. It will also adversely affect your credit score and lead to the lender treating you less sympathetically. If you cannot make the payment to your mortgage, then let your lender know. If you can, then make the payment – your home is a priority, and keeping up payments on it a necessity.