Definition
The failure to meet the legal obligations of a mortgage, most commonly by missing monthly payments. Default typically occurs after 90 days (three missed payments). Once in default, the lender can begin foreclosure proceedings. Before reaching default, most servicers offer loss mitigation options such as forbearance, loan modification, or repayment plans. Default severely damages credit scores and can remain on credit reports for up to 7 years.
Related Mortgage Terms
- Foreclosure
The legal process by which a lender seizes and sells a property when the borrowe...
- Refinance
The process of replacing an existing mortgage with a new one, typically to secur...
- Short Sale
A sale of a property for less than the outstanding mortgage balance, with the le...
- Amortization
The process of paying off a mortgage through regular monthly payments of princip...
- Annual Percentage Rate (APR)
The total annual cost of a mortgage expressed as a percentage, including the int...
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