The Consequences of Not Meeting a Mortgage Loan Repayment Agreement

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When you purchase or refinance a home, you must sign a loan repayment agreement with your lender. This agreement, known as a promissory note, states that you agree to repay the full amount of your loan balance in installments for a fixed period.

Additional Fees

If you do not make your loan payments in a timely manner, you will likely incur additional fees from your lender. Depending on your mortgage lender, these fees may be significant and make it more difficult to catch up on your mortgage payments.

Credit Damage

Mortgage lenders report consumer accounts to the credit bureaus. Each month, your mortgage lender sends a report to the credit bureaus detailing your most recent payment history. If you fail to make regular payments, your credit report will reflect the delinquent mortgage payments. This damages your credit score and makes future lenders less likely to lend to you. If a cosigner helped you qualify for the loan, his credit will also suffer as a result of your late payments.


Should you stop making mortgage payments altogether, your mortgage lender will eventually foreclose on your property. Foreclosure is a legal process through which a lender may seize your home as payment for the defaulted mortgage loan. The lender will then attempt to sell your home to recover its losses.