Mortgage payments are usually a significant expense for the average borrower. When everything is in order with a permanent place of work and income, making a monthly contribution requires only responsibility and commitment from the owner of mortgage housing. But as soon as some serious problems arise, making loan payments becomes problematic, and sometimes not at all possible. Often, a mortgage delinquency occurs in the event of one of the following circumstances:
- job loss or a significant decrease in income;
- loss of the borrower's ability to work;
- the occurrence of a serious illness in the borrower or his relatives;
- the birth of a child and the increased costs associated with it, along with a decrease in income by the amount of the salary of the spouse who is on maternity leave;
- the occurrence of circumstances requiring urgent repair of housing to bring it into a condition suitable for life;
- a significant depreciation of the national currency for loans in foreign currency, etc.
All this can lead to the fact that the borrower will not be able to make the monthly payment in the required amount on time. What is the risk of mortgage delinquency, and what actions will the bank take if it occurs? Let's talk about this in more detail below.
Slight late payment
The seriousness of the actions taken by the bank directly depends on how long the delay in mortgage payment is. If the borrower is overdue by 3-5 days, then, depending on the terms of the contract, he will be charged a small penalty or just a call from the bank with a reminder of the payment. As a rule, the penalty is on average from 0.1% to 1% of the contribution amount per day. Such small delays may occur due to the fact that the borrower did not calculate the time of receipt of their income or could not get to the bank branch on time and make the payment. In order not to pay small, but still fines, you should prepare the amount of the monthly mortgage installment in advance and, without waiting for the last day of making the payment, go to the bank.
If the borrower has made a delay lasting from one to several weeks, the bank will persistently remind him of the need to repay the loan. Letters with reminders will begin to arrive at the borrower's postal address, bank employees will call the borrower himself and his relatives. In addition, upon reaching a certain period of delay, the bank will transfer data about it to the Credit History Bureau, which will worsen the credit reputation of the borrower. From the day of delay specified in the agreement (usually 3-5 days), the accrual of interest will begin, which will continue until the borrower repays the overdue payment and the already accrued fines. With a delay of several weeks, this will turn into a decent amount, which will continue to increase in the future.
In order to prevent such a development of events, the borrower, who understands that everything is going to delay, must contact the bank in advance and report the impending problem. The bank can offer several options for its solution.
Firstly, the client may be offered credit holidays, during which he may not pay the loan body or not make mortgage payments at all (the mode of credit holidays in each bank is individual).
Secondly, if the agreement allows, the lender can restructure the debt by extending the term of the loan or changing the interest rate scheme. Do not ignore letters and calls from the bank, as this can lead to extremely negative consequences. 
Significant delay in payment
If the borrower stopped repaying the loan, having accumulated debt for several months and at the same time does not make contact with bank representatives, then he is threatened with a complete loss of housing. As a last resort, the lender may send employees directly to the client's home. They may suggest a loan restructuring scheme or other debt elimination measures. If the borrower ignores this last opportunity, then the bank will then apply to the court for the alienation of housing.
It should be borne in mind that, in accordance with judicial practice, the vast majority of such claims are satisfied in favor of the bank, since all these actions are prescribed in the loan agreement. In this case, the borrower will be forced not only to repay the entire loan amount, interest, fines and penalties, but also to pay legal costs, as well as a performance fee (7% of the amount of recovery). If the proceeds from the sale of housing are not enough to pay off all debts, other property of the borrower and his family members may also be described. If, on the contrary, after the sale something remains unclaimed, then this amount will be transferred to the borrower.
How to avoid late mortgage payments?
As you can see, both significant and minor delays in loan payments have unpleasant consequences for the borrower. In such serious loans as a mortgage, a delay in payment for a long time can turn into complete bankruptcy of the entire borrower's family. There are a number of steps you can take to avoid this, including:
- strictly plan the family budget, first of all, allocating the amount for repaying the loan, and only then for other expenses;
- create an emergency reserve in the amount of 3-4 monthly loan payments in case of unforeseen circumstances;
- insure life and work capacity (there are also programs that allow you to insure even against the loss of a job);
- in the event of force majeure with the complete impossibility of repaying the loan, it is necessary to contact the bank in a timely manner, explain the situation and try to agree on a possible solution to the problem.
