In other words, the borrower fails to repay the loan within the prescribed time limit, that is, it is overdue, and the mortgage is the same. Once the lender fails to repay the loan in time, it is overdue. If you don't repay for several months in a row, it will affect your personal credit record. It will be more difficult to apply for a credit card in the future.

2. Penalty interest:

If the borrower fails to repay the loan on time, he will not only need to make up the money, but also face penalty interest. If the borrower signs a loan contract when handling the loan, if the property owner fails to repay the monthly loan on time, according to the provisions in the loan contract, penalty interest will be incurred.

3. Economic losses:

When the mortgage is suspended for a period of time, the bank will apply to the court for auction of the property, and the proceeds from the court auction will first deduct various expenses, such as case acceptance fee, announcement fee, preservation fee, execution fee, evaluation fee and auction fee. And then it will be used to repay the bank's loans and penalty interest. Property owners may not get a penny, and may also face the responsibility of repaying bank loans.

4. Real estate auction:

If the property owner defaults, the general bank will give the property owner a grace period of six months, but if the mortgage is not repaid for more than six months in a row, the bank will apply to the court for auction of the house, and the proceeds from the auction will be used to repay the bank's loan and the penalty interest.

How to avoid mortgage default

1. Apply to the bank for suspension of repayment of principal:

The borrower can negotiate with the bank to see if it is possible to repay only the interest and not the principal for the time being. Because the bank has a house as collateral, it will generally accept the borrower's proposal and earn more interest. As far as the bank is concerned, as long as the borrower does not evade the debt subjectively, the bank has no loss.

2. Apply for extending the loan term:

We borrow money to buy a house, and bank loans can generally last for 30 years. During the repayment period, there will inevitably be a shortage of funds. At that time, the repayment period applied by the buyers was 10 year. At this time, it can be extended to 20 years according to the actual situation, which can also leave room for yourself and avoid the interruption of supply due to lack of funds.

3. Mortgaging or selling houses:

If you can't afford the loan at all, then I suggest you refinance the mortgage or sell the house. At least it won't lose money, which is much better than bank auction. You should know that if the default is auctioned by the bank, the proceeds from the auction will be used to repay the liquidated damages and interest first, and the rest will be used to repay the principal.