We all struggle with bills and financial growing pains at some point. When it comes to your mortgage, missed payments can lead to negative consequences that could cost you the home you’ve worked so hard to build. Understanding the consequences of missed mortgage payments can help you take the right action to avoid costly penalties and potential foreclosure.

When you miss a mortgage payment, your lender will generally charge a late fee and report this to credit bureaus after about 30 days. This can have a serious impact on your credit score, and the more missed payments you make, the worse your credit will be. If you miss a mortgage payment, the best thing to do is reach out to your lender right away and let them know what’s going on. They’re likely to be understanding and may even be able to work out a solution with you.

Once you’ve missed more than one payment, your lender will most likely notify you by sending a letter called a “demand letter,” or in some states, a “notice to accelerate.” This is typically the start of preforeclosure proceedings (foreclosure in judicial foreclosure states) or non-judicial foreclosure (deed of trust states). This can be a very scary time for homeowners, but it’s important to reach out to your lender to discuss your options before this stage is reached.

Most lenders will try to help their borrowers avoid foreclosure as much as possible. It’s in their best interest to do so as foreclosure costs them money and can damage their reputation in the community. Mortgage forbearance is a way for lenders to help their borrowers get back on track and avoid foreclosure by temporarily suspending or reducing your mortgage payments while you catch up. It’s not a solution for everyone, but it’s worth exploring if you’re behind on your mortgage.

You can also contact your state’s housing department or HUD to see if they have any programs that could help you stay in your home. These programs often include loan modification, which means changing the terms of your mortgage agreement to a lower interest rate, longer term, or reduced principal amount.

It’s important to remember that your ability to refinance in the future will be dependent on your creditworthiness and financial stability. Your credit score and mortgage payment history are large components of that evaluation, so if you’re consistently missing payments, you could be at risk for not being approved for refinancing in the future. That’s why it’s so important to make all your mortgage payments on time and stay ahead of your balance. For more helpful advice, check out our blog.