“When you make a mistake, there are only three things you should ever do about it: admit it, learn from it, and don’t repeat it.” – American college football coach and player Paul William ‘Bear’ Bryant
No homeowner wants to be in financial distress, but unfortunately as we all know, things happen. Here are some of the disastrous consequences if you happen to miss a mortgage payment or come across a deed error. But besides looking at the damaging repercussions, we’ll also offer you an easy solution to avoid these unnecessary homeowner pitfalls!
What Happens If You Miss a Mortgage Payment?
While seemingly no homeowner would deliberately miss a mortgage payment, again, life happens. If you do miss your mortgage payment, several scenarios can come into play depending on the timing of your late payment:
Within 15 days of the due date: if you manage to make your mortgage payment within a few days of its due date, it generally won’t impact your credit score as mortgage lenders customarily offer a 15-day grace period in regards to late payments
30-day late mortgage payment:
- There will be anegative impact on your credit score if you make your payment 30 days late, or don’t end up making your payment at all, as your mortgage lender will report your late/missing payment to each of the three main credit reporting bureaus (Equifax, Experian, and TransUnion).
- It’s important to note that your payment history comprises 35% of your credit score, so missing a mortgage payment can certainly be influential on your overall credit score
- a lower credit score can result in higher interest rates or not being approved at all if you need to apply for a line of credit or a loan in the future
- Your lender will impose late feestypically ranging from $25 to $50, which will be charged as soon as you miss your payment
45-day late mortgage payment: your mortgage lender will contact you to advise about payment assistance options that you may be able to take advantage of
60-day late mortgage payment:
- Your lender will charge you a secondary late fee
- Your lender will report your second missed payment to the credit reporting agencies
90-day late mortgage payment:
Your mortgage lender will send you a formal demand letter notice that essentially acknowledges your late payment status and advises that unless you start paying for the missing remittances, the lender will be forced to start proceedings towards judicial foreclosure
- The process of foreclosure means that your mortgage lender intends to seize your property as a result of you not making your mortgage payments in a timely manner as agreed
- Your credit score will plummet due to the court proceedings
120-day or more late mortgage payment: your mortgage lender will proceed with legal foreclosure by scheduling the foreclosure sale of your home and subsequently, you will forfeit your property
How to Avoid Missed Mortgage Payments?
Most mortgage lenders will require payments to be taken directly out of your bank account through auto withdrawals, so in case you forget to transfer money from one account to another in time, it’s vital to ensure that your designated mortgage account has a few extra payments stashed away to cover your payment, plus you can rest a bit easier if you know you’re a couple of payments ahead of the game. You can also ask your mortgage lender to establish an escrow account for property insurance and taxes where money is set aside through your monthly mortgage payments so funds accumulate and you’re ready to pay for home insurance and taxes when they’re due annually. Some lenders will offer a skip-payment mortgage option whereby you’re allowed to skip a single or more payments without being penalized.
What Happens If There’s a Deed Error on Your Property?
First of all, what is a deed error? Simply put, a deed error is any clerical mistake in your property’s legal description, including the address and/or boundary lines, that could cause your deed to be deemed invalid. Secondly, if your deed has an error, a new deed will be required by law, however, in some states, such as Florida, Georgia, California, and Texas just to name a few, homeowners can file a correction deed to amend commonplace errors such missing information, typographical mistakes (also known as scrivener’s mistakes), incomplete names, or misspellings. A correction deed can also be used to rectify the way in which the deed was acknowledged or executed.
How to Avoid Deed Errors?
While this can be a tough one if the error was previously made such as with a clouded title or cloud on title, you can do your due diligence as a homeowner by checking with your local public offices to ensure that:
- there are no liens on your property, and that any liens showing have been paid
- property descriptions and information on your title are correct
- property easements have been recorded
- take advantage of our DomiDocs® home documents feature where you can upload, organize, and categorize your vital homeowner paperwork in our highly secure home management platform so you’ll never have to look for your important papers again!
How HomeLock™ Can Help Prevent Missed Mortgage Payments & Deed Errors
Generally, a lien will stay in place until your creditor has been repaid in full and subsequently releases or negates the lien. You may need to request a Release of Lien form which serves as proof that your debt has been paid off. Negotiating with creditors is another way of removing a property lien, or by taking legal action through the courts with the lien holder to enforce removal.
The primary focus of HomeLock™, the #1 rated property fraud protection system in America, is to provide proactive property fraud protection with title and deed monitoring. Scanning 200+ data points and with 24/7/365 monitoring, HomeLock™ will alert you to missed mortgage, property tax, HOA, or rental payments, so you’ll never have to worry again. HomeLock™ also provides fraud resolution services. Our dedicated HomeLock™ Fraud Protection team will assist you with up to 2 hours of resolution services annually including research on alerts found, resolution information for various sites, and in-house attorney fees. HomeLock™ membership includes $100,000 in legal services for fraud defense and a Cyber Insurance Policy offering $1 million in coverage. Plus, HomeLock™ also includes our award-winning home management platform which strengthens our commitment to making your life as a homeowner as easy as it can be. We’re rated 5/5 with both Google and the Better Business Bureau so you know you’re in good hands!
Whether we’re providing educational resources on deed errors & missed mortgage payments or how to weather natural disasters, DomiDocs® is committed to simplifying home management by offering functional tools designed to help save you both time and money including streamlined document organization, real-time market value tracking, and more! In addition, our next-level HomeLock™ fraud protection system provides 24/7/365 monitoring against home fraud, unpaid bills, missed payments, and misfilings, giving you the peace of mind to just relax and enjoy your home! Visit HomeLock™ today to watch our introduction video and check out our FAQs. As a bonus when you sign up, you’ll receive a comprehensive 7-year home history report and scan free of charge.
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Author – Connie Motz