256 A mortgage loan is a long-term financial commitment. The borrower may encounter difficulties that prevent them from completing their mortgage payments on schedule. When does it occur? In case of a house loan default, what measures will the bank take? Any idea what happens if you don’t pay your mortgage on time? Table of Contents The Repercussions Of Delaying Mortgage PaymentsWhat Are Your Rights If You Cannot Repay A Loan?Borrower’s ActionsStep One:Step Two: Third Step:Conclusion The Repercussions Of Delaying Mortgage Payments You may get a loan for up to 80% of the property’s value from most banks and NBFCs after verifying your home loan eligibility. Rising housing prices have made it impossible to buy a house without a mortgage. Mortgage origination fees and interest rates have dropped significantly in recent years. That, with the bonus of tax breaks, has made mortgages so widely available. Home loans are appealing because they facilitate the purchase of a house, but they can become a source of stress if you cannot repay the loan. It is a long-term obligation, and the borrower may experience temporary financial setbacks, such as the loss of employment or a medical emergency that prevents them from making their regular EMI payment. What would happen if we were unable to make the loan EMI payments? As was previously noted, mortgages are long-term loans, with most banks capping their loans at 30 years. Borrowers risk repossessing their homes if they fail to make monthly EMI payments for over three months. You must realise that the bank is not interested in repossessing the home and selling it at auction. That’s why they have a procedure they’ll go through before resorting to house repossession if necessary. What Are Your Rights If You Cannot Repay A Loan? The bank will send a reminder letter to the borrower after the second month of nonpayment. Once again, the bank will use formal notification to request that the loan balance be paid in full. If the borrower still does not make payments after receiving this notice, the lender will schedule an auction for the property one month after sending it. In this case, the borrower has up to six months before the property is auctioned. The client may use this period to arrange a meeting with bank representatives to solve the problem. Borrower’s Actions Step One: Don’t freak out! You have ignored the bank’s letters threatening legal action because you failed to make payments. Make sure all your paperwork is in order. Your loan documents should include the following information: loan amount, loan term, interest rate, EMI amount, EMI due date, EMI history, etc. As soon as you obtain this information, call your bank. As previously indicated, they will be willing to listen and provide assistance as needed. For them, too, it is a lengthy and expensive process. Step Two: Get an extension if you need one. Explain to the bank that you have made your EMI payments on time but need a grace period because you have experienced financial hardship, such as losing your employment. All the paperwork and statements you prepared using the home loan repayment calculator will come in handy now. If the bank determines that you are a genuine borrower, it may extend the grace period in exchange for a penalty. Third Step: Investigate your choices. Inquire about your repayment choices with your bank. Maybe you might look into refinancing your debt. The bank may extend the loan’s term in this situation to reduce your monthly installment payment. This provision is made in case the loan’s interest rate increases, making it more challenging for you to make the required monthly payments. You might also consider selling off valuables to settle your obligations. You may need to liquidate your assets, such as stocks, bonds, and savings accounts, to pay your financial debts. Perhaps a partial payment would buy you some time until your finances return to normal. Conclusion Even if you get behind on your EMI payments, your financial situation will not worsen. However, rather than risk having a defaulter status on your credit record, which would prohibit you from acquiring any additional loans, it is always best to talk with the bank and pay off the obligations or come to an arrangement. Banks want to work with you since they will feel the effects of your debt default just as much as you would. Resource: https://www.hvmakingnews.com/2022/10/14/what-happens-if-you-fail-to-repay-your-home-loan/ home loan eligibilityhome loan repayment calculator 0 comment 0 FacebookTwitterPinterestEmail Uneeb Khan Uneeb Khan CEO at blogili.com. Have 4 years of experience in the websites field. 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