In the event of delay, suspension or cessation of payment, it is important that you quickly contact the bank. If you take the initiative, the lender will generally be more willing to find an amicable solution, such as granting payment facilities or extending the term of the loan.
But be aware that changing credit conditions can cost you money. A less advantageous rate could be applied to you. You may also be liable for additional fees.
How does the bank intervene?
Rest assured: the bank cannot automatically put your home up for sale. Its intervention is strictly governed – and limited – by law.
- Without your intervention, you will first receive a reminder of the existence of unpaid deadlines.
- Within three months of the due date, the lender will send you a formal notice, by registered letter, with a reminder of the consequences of non-payment.
A late payment of a few months does not immediately lead to the forced sale of your property. Such an action requires a procedure, which first passes after termination of the credit by an attempt at conciliation before the foreclosure judge, the appointment of a notary in charge of the sale, etc.
Do you risk being filed?
If you have not fully reimbursed a monthly payment within three months of its due date, the bank will be obliged to notify it to the Central Credit Office for individuals of the National Bank, which will indicate it in its negative section.
This will make it harder for you to get new credit. Your file remains posted until one year after the settlement of the excess.
Your banker can help you
If your financial capacity decreases due to unforeseen circumstances, do not wait until it is too late: contact your banker to discuss it with him. Together and in a spirit of mutual understanding, you can seek a solution to reduce your monthly financial burden. Several solutions can indeed be envisaged in the case of a mortgage loan. Obviously there always has to be a credit study and there has to be an agreement from the credit committee.
- Deferral of the payment of the capital: the monthly payment consists of a part of capital and a part of interests. To reduce the monthly amount, a temporary postponement of the reimbursement of the capital may be considered. However, deferral of interest is not possible.
- Extension of the term of the mortgage loan: it may be worthwhile to extend the term of your loan. The repayment of the capital will then be spread over time, which will of course reduce your monthly charge.
- Early (partial) repayment: if your financial means allow it (available savings), you can also consider an (partial) early repayment of your mortgage, which will lower the monthly charge or reduce it to zero.