Life is unpredictable. Unexpected circumstances might come along and cause a financial issue. Prioritizing your basic needs is understandable. Home loan repayments tend to be one of the bills that we choose to delay because it won’t have an instant effect on daily life. However, home loan repayments should be a priority so as to avoid more problems in the future.
What are the effects of a neglected home loan repayment? Continue reading to know more about the outcome of missing your repayments!
Find out more about home loan rates here!
Most lenders do offer a grace period of 7-15 days. This grace period may save you from penalties for your late payment. You should get in touch with your lender to find out about this. A repayment made after your grace period will cause an increase in your interest fee. Some lenders may not give a grace period at all. This means your lender may charge you for payments made after the due date.
Lower Credit Score
A late payment won’t just give you a fee penalty. It may also damage your credit score. Your lender has a credit score system to track your credibility as a client. Late payments may lead to losing points on your credit score. Lower credit scores mean fewer opportunities for future loan benefits.
Negative Effects on Overall Credit History
If you keep making late payments, your lender may also report you to the Credit Bureaus. This will scar your overall credit history. Bad records on your credit history may remain there for several years.
Foreclosure of Property
Neglecting your home loan repayments for 90 days may cause the foreclosure of your property. At this point, the lender may give you a notice for foreclosure. If no effort is made on your end, the lender may take possession of the property and evict you. Foreclosure of the property will also be added to your credit history. This will make it difficult for you to get another home loan.
When we get a home loan, we make ourselves accountable for all our repayments. If you’re undergoing some financial troubles, keep in touch with your lender and cooperate with them to do whatever is necessary to save yourself from bigger troubles!
Check out debt consolidation loan plans as well!