What to Do When You Miss a Home Loan Payment
Taking out a home loan has become a popular way for many homeowners to borrow money for a wide variety of purposes. With a home loan you are taking out a secured loan, which is secured against your home. Unlike an unsecured loan, which is trust based since it is not secured against any assets. The home loan offers low interest rates as well as long repayment terms, which means far more affordable monthly repayments. However, the one thing you must always bear in mind is that a home loan is a secured loan, which means that failure to make repayments could mean that you lose your home.
Of course, none of us can predict the future, and however good your intentions there may come a time when you do end up missing a home loan payment, albeit inadvertently. The crucial thing to remember if you do miss a home loan payment is that you must never simply try and brush it under the carpet and ignore it. Although the lender is unlikely to start repossession proceedings right away, a missed payment can be the start of a slippery downward spiral that could result in the loss of your home.
As soon as you realize than you have missed a payment, you should call the lender immediately and inform them of what has happened. You should explain why the payment has been missed – this could be due to anything from a bank error in sending the money to a delayed check in the post or simply because you don’t have enough money in your account to make the payment. The reason for your missed payment will determine the next course of action.
If you have missed a payment inadvertently, you should advise the lender you will be sending a check or payment in as soon as possible and ensure that you follow this through. If the missed payment is because you are short of cash for that particular month, you should come to some arrangement with regards to making the payment the following month or in instalments if it is a large sum. If you feel that you will struggle to make payments in the future as well, you need to discuss the options with your lender, who may be able to draw up a new payment plan with lower payments.
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