28 Nov 2021

How Can I Legally Stop Paying My Mortgage?

When you purchase a home and finance it, you reach an agreement with the lender. This is especially true for fixed-rate home loans. In fixed-rate home loans, the lender reaches an agreement with a wholesaler. The lender guarantees the customer and the wholesaler agrees to a discounted rate.

Once you agree to the lender’s loan terms, you agree to make a repayment monthly at the least. If you miss a payment, the mortgage goes into arrears. Tricks exist that help you skip two payments. but it’s not a long-term solution.

You can legally stop paying a mortgage. After a set time, you begin to repay it again. Forbearance allows the homeowner to freeze their mortgage repayments for six months. Keep in mind that the interest rate clock continues to tick. Even though you freeze your monthly principal repayments, you can pay the interest only.

If you skip making the interest-only repayments during the forbearance period, the lender capitalises it. When the repayments begin again, the loan becomes more expensive. 

Sometimes it’s necessary to employ this tactic. It gives the homeowner time to regroup their finances. Before the forbearance period ends, speak with the lender. If you need additional solutions, they could help you out again.

Legally Stop Paying Mortgage Conclusion

It’s possible to legally stop paying a mortgage. However, it doesn’t mean that you stop owing it. Plus the interest rate clock never stops ticking. It helps to understand home loan rates.

If you find yourself in financial hardship, contact our Mortgage House loan specialists. They can offer you an array of solutions. 

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