Mortgage & Commercial Lending News.

Houston's premier blog for all things related to Commercial and Residential Hard Money Loans.


When Things Get Complicated for a While: Missing a Mortgage Payment and what to do about it

Posted by Jim Emerson

Sep 9, 2022 12:00:00 PM

Missing a Mortgage Payment

Our outlook on real estate and life is usually quite positive at AMI Lenders. That's why our blog is choc-full-of upbeat advice on what to do and think about when you're evaluating purchasing a house or investing in real estate—always looking optimistically towards the future. But we noticed lately that we barely touch upon themes about your mortgage or hard-money loan once you have received the money. We expect our clients to meet all their obligations on time, but that is not always the case. As such, we thought it would be a good idea to touch on some thorny issues that can happen when things don't go our client's way. Hopefully, they will never materialize for you, our faithful reader.

Ten years or more is a long time.

Once you receive a loan to purchase a property, you acquire a legal obligation to meet your future monthly payments on time. After having purchased a property, and in many cases going from tenant to homeowner, a few things might happen to your personal or family’s budget:

  • You could be left with very few available (“liquid”) savings because you most likely put most of them towards your down payment and some needed repairs. Indeed you have your IRA, but that's not available to cover emergencies.
  • You probably are paying more for the monthly payment than you previously paid for monthly rent. You are now responsible for property taxes, home insurance, and upkeep.
  • Your budget is probably very tight during the first years, and you are saving through building equity in your property rather than saving in a bank account.

During the duration of your mortgage loan (10, 20, or 30 years), there might be a moment when your income could fall short of your needs. In everyday speak, you might not make ends meet for a (hopefully short) period. Late payments may be inevitable in a month when you encounter setbacks, including a visit to the emergency room with a child, a car accident, a house break-in, or any other unfortunate issues. Missing one payment won't spell immediate disaster; however, it can signify further trouble looming on the horizon.

Some folks will tell you that missing a mortgage payment may have consequences in the short term than are less dire than not paying other bills. Still, the implications could be significant and should be avoided if at all in your ability to pay.

What happens if you must miss a mortgage payment?

Several things will happen when you miss a mortgage payment.

  1. You could (and most likely will) be charged late fees.

Late fees are a standard part of any mortgage or hard-money loan agreement. Their impact on your finances is clear: these fees add to the amount you have not paid and, consequently, will squeeze your budget even more. Sometimes, missing a timely payment may be unavoidable. In any case, you will still owe the amount and will now owe a bit more: the assessed late fee.

  1. You could be reported to a Credit Bureau, impacting your Credit Report.

Suppose you fail to make a payment to your lender. In that case, they will eventually report this event to credit bureaus, adversely affecting your credit score for many years. Some lenders won't report late payments for as many as 60 days, giving you a time window to remedy your default. This time frame should help you make budgetary adjustments and, hopefully, get the problem under control.

The best scenario is that if you pay the mortgage late (but not too late), you might only be hit with the late fee without your lender reporting the delay to the credit bureaus. As such, this will only affect your budget while keeping your credit report unscathed.

  1. You could miss the opportunity to access new credit lines

Maintaining a current schedule of installments is essential to keeping your options open for new lines of credit, refinancing, and other aspects of your routine financial life.

  1. Lack of discipline could lead you down a slippery slope.

A single late payment in all your mortgage's duration will not cause you too much trouble. However, missing two, three, or more payments may initiate foreclosure proceedings, depending on your lender’s internal policies. Multiple missed payments, incomplete payments, and other shortcomings in paying the loan can result in legal troubles for you.

Foreclosure puts you in a bad position for several reasons:

  • You'll lose the property and your place to live.
  • If you lose your house, you won't enjoy the financial boost derived from the property's accumulated equity or provide you with the capital resources to purchase a new, albeit smaller, property.
  • It will affect your credit and financial stability.
  • Taking a credit score hit makes borrowing in the future more complicated.

What to do about it?

If you are experiencing financial trouble, the best course of action is to speak with your lender about the issues you are facing. You will not be the first or last creditor to miss a payment. Your lender will appreciate what is always front and center in all financial dealings: the importance of transparency, honesty, and continual conversation.


Speak to your lender about any difficulties affecting your ability to repay your loan, either for a single month or over the foreseeable future (as might be the case with the loss of a job). It will help you gain the lender's confidence, empathy, and perhaps even a clear path to rectifying the situation.


If you have a loan with us, do talk to us about any financial troubles you might be facing. If you have decided to purchase a home in the Houston area, consult with AMI Lenders. We are one of Houston's fastest closers and could become your financial ally. We fund our loans and can move as fast as the law allows. Borrowers in Houston will also have a hard time finding lower rates for hard money or private loans than we offer. We want our customers to succeed and take advantage of the financial opportunities offered by home ownership. Visit our website today and fill out an application for a loan backed by a mortgage.

Topics: houston, private money lender, AMI Lenders, mortgage


Our Hard Money Blog

AMI Lenders' Commercial Lending blog contains helpful information to help you understand the intricacies of Commercial Hard Money Lending practices in Texas. 

Apply Today!

Recent Posts

Subscribe to Email Updates

Posts by Topic

see all