Penalties and mortgages

When a person decides to buy a property with the involvement of mortgage money, a lot of situations arise that require additional explanations. Despite the fact that penalties are prescribed in the contract, it sometimes becomes necessary to explain how they differ from each other. Even a punctual and responsible borrower can have unforeseen situations.

Penalties are the levels of monetary compensation stipulated and fixed in the contract, which are levied from the person for violation of contractual, contractual terms. With regard to lending, they are most often appointed for late fulfillment of obligations, a violation of the payment schedule. In the process of requiring the payment of a penalty, the creditor has the right not to prove the existence of the losses incurred. Also, he can not demand payment of penalties in the event that the debtor is not responsible for the obligations undertaken.

Penalty - a type of penalty, which is applied in those cases and in the order that is established by the contract or law. It is determined by the established amount or percentage of the total amount of the contractual obligation that was violated. Penalties provide for the execution of a mortgage contract and are an appropriate measure of liability, which is provided for breach of obligations. Penalty is charged for a continuing offense and is more often expressed as a percentage of the total amount of the obligation breached. In some cases, it is possible to pay it in a firm amount. Accordingly, the penalty is applied in two main forms: a fine and a penalty. The conditions associated with it are described in each loan or loan agreement.

There are situations when the borrower, due to circumstances, misses the monthly payment and the bank decides that these reasons are respectful. For example, if you change or lose your job, you must automatically warn the bank yourself. It is worthwhile to do this before the organization claims itself to the borrower, since the relationship to the subject will already be formed, it will be difficult to change it for the better in the future. So, in this situation, a deferred payment and re-crediting is possible. However, it is extremely difficult to implement the latter when the borrower has no funds.

In the event that the bank decides that the reason for not timely payment of the required amount is disrespectful, according to the loan agreement, the penalties are paid first. Accordingly, when making the next payment, the forfeit will be covered first, and then directly the loan. Therefore, it is worthwhile to make sure that the main monthly amount is full, otherwise the fine and fine will have to be paid in the next month.

In a situation where a violation of the timing of payment for a mortgage is systematic, the bank may require an early repayment of the loan. Most often this happens if the borrower does not make payments in a timely manner and does not pay penalties under the contract for three years or the delay is more than 90 days.