What Happens After Missing a VA Mortgage Payment
Housing market instability, economic uncertainty, elevated costs at the gas pump, and rising prices on eggs and other groceries all combine to create financial problems for American homeowners.
Despite the federal government’s promises to lower grocery costs and other expenses for servicemembers, veterans, and families, many continue to face hardship, forcing them to choose between paying the mortgage, buying food, or covering medical bills and other obligations. Some individuals opt to delay mortgage payments to make ends meet, but this can have long-term consequences for those who fail to promptly catch up on late or missed payments.
Will I Lose My Home After Missing One VA Loan Payment?
Missing a single mortgage payment is a big deal, but it does not automatically lead to the loss of the home purchased with a VA mortgage. But time is of the essence.
That’s because there are few options for those who slide into home loan delinquency and default if they don’t act quickly to save their home. At the first sign of financial trouble, a VA borrower can avoid future problems by contacting the lender and making arrangements to weather a period of financial instability.
Some may give in to the temptation to skip a VA mortgage payment under these circumstances, but it’s best to act only after you’ve discussed your situation with the loan officer.
What’s the very first thing I should do if I Have Missed a Mortgage Payment?
Contact your mortgage servicer the moment you realize you’ve missed a payment. This is the company that collects your payments. Don’t wait for them to call you. Taking the initiative shows you’re responsible and ready to find a solution. Before calling, have your loan account number and an honest explanation for the missed payment ready.
Will I be charged a fee right away?
No, you likely won’t be charged a fee immediately. Many home loans include a 15-day grace period, ask your loan officer about this as it may apply to your VA mortgage.
You can make your payment within this window without a penalty. After the 15-day grace period expires, a late fee may be added. For VA loans, this fee is capped at 4% of your overdue principal and interest payment.
How will missing one payment affect my credit score?
The first 30 days are a critical window. Some mortgage servicers generally do not report a late payment to the major credit bureaus until it’s a full 30 days past due.
If you make the payment before you are 30 days late, the incident will likely never appear on your credit report. If the payment becomes 30 days delinquent, the servicer will report it. A single late mortgage payment can cause a drop in your FICO scores. This may remain on your report for as long as seven years.
The Department of Veterans Affairs (VA) guarantees your loan, so it has a strong incentive to help you avoid foreclosure. The VA employs a team of VA Loan Technicians who assist veterans struggling with their payments. This is a free resource. They provide financial counseling and can talk directly with your mortgage servicer on your behalf. You can reach them at (877) 827-3702.
What options can my lender offer to help me get back on track?
If you’ve acted quickly after only one missed payment, you’re in a strong position to get help. The primary options include:
- VA Home Loan Repayment Plan: This is the simplest solution for a temporary setback. You agree to pay your regular mortgage payment plus an additional amount each month for a few months until you’re caught up.
- Special VA Loan Forbearance: If you’re facing an unresolved, temporary hardship (like a job loss or illness), this agreement lets you temporarily pause or reduce payments. Forbearance is not forgiveness; you must repay the missed amount later.
- VA Home Loan Modification: For a more permanent financial change, a modification alters the loan’s original terms to make payments more affordable. This could involve lowering the interest rate or extending the term of the loan.
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About the author
Editor-in-Chief Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.
