A client’s financial path isn’t linear over a 30 year period. Even the most well-qualified client experiences a financial bump once. Some clients will find themselves in a situation where they need to request to skip a mortgage payment and add it to the end. Mortgage Street offers loan modification and deferment options to clients facing financial hardship.
Even though the deferment is granted, it’s important to help clients keep a few things in mind. Skipping a mortgage payment and adding it to the end extends the life of the loan. Plus, an additional month in interest charges accrues. A $300,000 mortgage over 30 years and an interest rate of 3% sees a monthly repayment of $1,265.
Based on amortization, $750 of the $1,265 goes toward interest in the first month. Thereafter, the amount that goes toward interest falls monthly. At 30 years, the client pays a total of 360 payments for this particular mortgage. When they reach payment #100, $606 goes toward the interest. If there’s an interruption in the payment schedule, the interest charge clock doesn’t stop ticking. In some cases, lenders capitalise on missed repayments. This action increases the principal loan amount and the interest charge.
Skipping a mortgage payment and adding it to the end isn’t a worst-case scenario, but it’s cause for concern. If it’s a one-off request, the client remains in good standing. When a client makes the request more than once, something is going on.
Mortgage Street loan specialists take the time to listen and offer solutions.
Skip a Mortgage Payment Conclusion
If a client needs to skip a mortgage payment and add it to the end of the loan, Mortgage Street will consider the request. Our loan specialists may offer a deferment or loan modification. There are other options too. For more information, contact our team.