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Mortgage  Question?
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How Mortgage Payments Applied if Start Paying Again?

How are mortgage payments applied if you stop paying your mortgage and then start making your payments again? Are they applied to the missed payments or the payment due for the current month? I was unable to make my payments for several months a couple of years ago.

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

Your mortgage note outlines how missed payments are handled, including any late fees you incur and what you are required to do to cure any delinquencies. With most mortgages, borrowers are required to bring the mortgage current by paying any past due amounts and penalties before the lender accepts any regular monthly payments. Your mortgage note may have different terms or you may have structured a "work-out" or payment plan with you lender to payback the past due amount over time. In short, it is unusual although not impossible, for borrowers to miss their mortgage payments for multiple months and then resume making their regularly scheduled payments without addressing or resolving the past due loan amount -- it all depends on your mortgage note and how your lender handled your situation.

In most cases, if borrowers fail to bring their mortgage current within a specified time period that triggers a default and eventually the lender may be able to foreclosure on the property. It sounds like you have been making your mortgage payments on time for several years since you missed your payments so this worst case scenario does not apply to you.

My recommendation is that you contact your current lender and understand how the missed payments were handled and if you are required to take any steps to bring your mortgage current, such as paying a past due loan amount and late fees.  Having clarity on this issue will be helpful if you decide to refinance your mortgage in the future.

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About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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