What Does It Mean to Default on a Mortgage Loan?
To default on a mortgage loan means to fail to comply with the terms and requirements of the mortgage. The most common type of default is failing to pay the mortgage's required monthly payment.
Defaulting on a mortgage loan will impose serious consequences on you as the borrower. The most common of these consequences is that the lender can require you to immediately repay the late amount, and in some cases, require you to immediately repay all of the total outstanding balance (this is usually called an "acceleration of the debt"). The lender might grant a “grace period” for you to repay the total amount, but this is not always the case and will depend on the terms of the mortgage agreement.
More significantly, in the event that you continue to fail to pay the total outstanding balance as required for an extended period of time (typically more than 90 days after the acceleration of debt), the lender can foreclose the debt and initiate foreclosure, which will lead to the seizure of your property.
- Is Paying Off My Mortgage Always the Best Financial Decision?
- Is It Better to Pay Off a Mortgage as Soon as Possible?
- What Happens If I Default on My Loan?
- Is It Possible to Make Late Payments on a Mortgage?
- What Is a HUD-Approved Housing Counselor?
- Where Can I Find My Delinquency or Loan Default Information?
- What Are the Consequences If I Default on My Mortgage?
- What Is a Strategic Default?
- How Do I Strategically Default on My Mortgage?
- How Do I Get out of a Mortgage?