Can a mortgage company refuse a payment? How many times have you been paying your mortgage with a credit card or a money order and then had to wait until the next month’s payment came in, only to find that your money is not there? What if the next payment that you were due was for three months instead of the usual two? This would be very frustrating indeed. Can a mortgage company refuse a payment like this?
The answer is yes!
The mortgage lender has the right to refuse a payment and charge a late fee or interest charges. They may also insist on a security bond. But tenants have more flexibility. In fact, the lease contract can give tenants many legal ways to avoid extra payments. There are usually no penalties for the tenant to pay rent in advance or to set up a payment plan.
For example, you and your family have agreed that you will pay rent for the month on a specific date. However, the following month the rent payment gets rejected and you get a letter from your landlord stating that he is legally obligated to let the tenant pay the rent. In many countries, this is illegal. Your landlord may sue you for breaching his contract.
If your landlord is in a strong position, your best bet may be to negotiate with him. Tell him that you have cancelled your lease for the months mentioned in the lease and that you will pay the rent in full on the agreed date. Ask him to explain the legal grounds for refusing the rent payment. If he refuses, you can ask the court to stop foreclosure and have the mortgage company respect your legal rights.
It is hard to know what is personal and what isn’t when it comes to such payments. However, it should be kept in mind that a mortgage company is not allowed to refuse a payment just because you have already started living in the house. The payment must be done before you move in. There are some companies which allow you to pay the payment after you move in but this is rare.
When you are buying a property, you should always ask the real estate agent to show you the contract. This is to know all the terms and conditions of the agreement. The same applies when you are getting ready to buy a property. You should always read the entire contract before signing. A mortgage company can refuse a payment simply because they don’t agree with what is written in the document. You can either demand a re-write of the documents or you can discuss things with the company.
If the rent is too high
The reason for this is that the mortgage company will get paid more if the rent is high. If the rent is low, the company has less chance of getting paid. It is better to pay higher rent in order to maximize the profits.
Before you enter into any type of agreements, make sure that you understand them completely. Be honest with the mortgage company so that you won’t end up paying more than you should. Don’t hesitate to go over the document with a legal professional just to make sure that everything is correct.
For example, if you are going to sell the property, the mortgage company will not be happy if you charge rent for the first year and then let it increase. This is against the agreement. The company might also refuse to allow you to sell the property if the price is too high. Sometimes the company will also refuse to grant you a loan if the money will be used to pay rent.
Don’t forget that there are different terms for different companies. Always read the fine print very carefully. You need to know what you are agreeing to. This is important especially if you want to avoid surprises. You don’t want to pay a lot of fees only to find out that the mortgage company won’t accept your payments because it doesn’t fit their terms.
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