Can A Mortgage Default Send Me Into Debt?
Can A Mortgage Default Send Me Into Debt? Table of Contents If you’re facing a mortgage default or are having difficulties making your repayments on
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If you’re wondering how a mortgage default might affect your credit score, you’ve come to the right place. If you have a mortgage default listed on your credit file, you might find that you have difficulties getting approved for a loan, or a decrease in your credit score, depending on the type of default.
If you’re wondering what the effect on your credit score might be with a mortgage default, read on below.
A mortgage default happens when a borrower is 90 days or more behind in their repayments for their home loan. Once the time period of 90 days or more has passed, a default is listed on your credit file. A mortgage default can potentially affect your credit rating, and have implications if you choose to apply for future loans.
When you default on your mortgage, a default will usually marked on your credit file. In most cases, your lender must notify you that you will receive a default before they can request the default be listed on your credit report. In the initial notice you will receive, your lender may advise you that you have fallen behind on your repayments, and request payments to be made as soon as possible. After this first notice has been sent to you, your lender might then send a follow up request for payment.
After these notices have been sent to you, your lender may decide to report your overdue debt to a credit reporting body. This means that your debt will be listed on your credit report, and could negatively affect your credit score over time.
It’s also possible to face other penalties if you are overdue on your mortgage repayments, such as penalty interest being added to your total debt amount. Penalty interest is an extra amount that is added on top of your debt if your repayments are missed. The amount of penalty interest charged will usually depend on your lender and their loan terms.
Whether or not a mortgage default will seriously affect your credit score depends on a few different factors.
If you want to apply for another loan after having a default listed in your credit file, you might find that a lender could reject your application based on your past history. The more defaults that you have listed on your credit file, the less inclined a lender could be to approve your loan application. A lender could see you as high risk and more likely to default on a loan again.
You also might notice a negative change in your credit score once you have a default listed on your credit report, and especially if you have more than one. A default can stay listed on your credit report for up to five years, regardless of any repayments made in that time.
SR & Associates has more than 40 years of experience and has successfully helped 1,000’s of people Australia wide. We aim to provide support services to those who do not know where to look, or who don’t know where to turn during the mortgage default process. We can advocate for our clients to help to stop them from being harassed and hounded by creditors.
Our helpful advocates can give you confidential assistance, and find a personalised solution that works for you. We can also assist you in finding a solution to your mortgage issues in addition to advocating for you, without any nasty hidden fees. If you need help and support, call our supportive advocates for your free consultation today.
*Disclaimer: This article contains general comments and recommendations only. It is not intended to be and should not be construed as legal advice. This article has been prepared without taking account of your objectives, financial situation or needs. Before taking any action, you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs.
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