A predetermined amount of cash from the lender that you will have to pay each month is a scheduled mortgage payment. This is normally indicated in the mortgage contract and the promissory note that you sign together with the lender. It includes interest, principal, taxes and in some instances mortgage insurance as provided in the terms of the mortgage agreement. When you pay less than the scheduled mortgage payment, you are considered a delinquent borrower. If you remain behind, the lender can go after your collateral to enforce the full collection of your account. Read carefully the terms and conditions of your loan contract in order to avoid being declared in default.
Other Meanings of the Term
The scheduled payment depends on the loan itself and the agreement reached by the lender and borrower. For example, most mortgage lenders consider a full payment of amortization during the life of the loan as the scheduled payment. On the other hand, for mortgages with an interest only option, the scheduled payment is the interest payment for the first five or ten years. However, when the borrower is required only to maintain a certain balance or a specific amount for every period, in such a case there is no scheduled payment.
Make the Calculation
There are several ways to compute the payment but the general procedure is to multiply the principal by the agreed interest rate and divide it by the number of months in order to get the result. Several websites are abuzz with many mortgage amortization loan calculators to help with calculating a scheduled mortgage payment. What you need to provide is the interest rate, the term of the loan and principal. In just a few seconds, you will have the amount that you will need to pay on a regular basis. In case you are not familiar how to calculate it, ask your lender how to arrive at the figure.
The Importance of Paying On Schedule
You have to make your payment every month on time. If you fail to meet the deadline, expect that your lender will charge you penalties for late payments. This will cost you more money other than the interest you might be paying for the loan. There are some lenders who charge excessive penalties for defaults or late payments and partial payments. You will not only get penalized but there are lenders who are very strict about their collection campaigns. Once you default on your scheduled mortgage payment, they will automatically refer your debt to legal attorneys for collection. Collection agencies are more coercive in their approaches. There are some that they will charge you 25% of your unpaid account plus threaten with a court case to follow. Avoid signing a mortgage contract with an accelerated provision that declares all your balances to be due once you fail to pay several amortizations.
You should properly address the scheduled mortgage payment in order to avoid any hassle with your loan. If you cannot settle it on time, your property is at risk of getting foreclosed.