How can you skip a mortgage payment

If you buy a new house before selling the old one, what can happen if you fail to pay the old mortgage?

I am researching the process of selling a home and buying a new one. Several articles warn against buying the new home before selling the old one as you may have to pay two mortgages. I wonder why they would keep paying the mortgage on the old house?

Obviously, if you have equity at all, you don't want the house to be foreclosed, but what's to stop you from skipping two or three mortgage payments while trying to sell the old house? Personally, I may have ethical concerns, but is there anything else to worry about?

Dilip Sarwate

-1 The mortgage on your old house is a legal contract that requires you to make monthly payments until the loan is repaid. That you are looking for a new home, or bought a new home, or moved out of your old home and living in an apartment while looking for a new place or even moving out of the country, does not help You of the contractual obligation to make the monthly payments. If you're asking about what you learned in the "research process," I recommend throwing away all of that research and starting over with a new board.

fennec

Questioning +1 - it's a bad idea, but it's not worth -3 points to be terrible ask

gef05

This is not a page about ethical debates. It's a page about personal finance. I agree to close.

fennec

"Personally, I may have ethical concerns, but is there anything else to worry about?" - That doesn't require an ethical debate. It is explicitly bypassed and asked about personal financial implications, and there are several of them and it's not a bad idea to be aware of them.

George Marian

I don't understand why people are piling up. This is a valid question. It is no ethical debate. It works Not about how to do something illegal. That is actually a very practical question. I quote: The answer is very factual. There is no opinion. There is no debate. There is no argument. So far, 4 of you have ignored the guide for the reason you selected.

fennec

Late payment fees, damage to your funds, and the risk of not actually selling and therefore missing out on more than a payment or two.

KeithB

And the owner of the mortgage requires you to pay any outstanding amounts (principal, interest, fees, etc.) on closing in order for the sale to be completed. So you don't "save" anything.

littleadv

But what's going to stop you from skipping two or three mortgage payments while trying to sell that old house?

Simple: the sale of the old house. You can't sell the house without paying off the mortgage. This includes any missed payments, interest and penalties, as well as additional fees like collections, attorneys, etc.

Bottom line: ethical and legal concerns (fraud allegations etc) aside, the only way to lose money trying to sell this home is by missing out on payments.

Yishai

There's a much more practical consideration here: your old home may not sell in two or three months. Or even in a year. It will leave you desperate. Even if you have enough equity to discount the price enough to move, you will lose a lot of money (possibly tens of thousands of dollars depending on the market) if you panic and rush to move that old house.

It is much better to get a contract to sell your old home first. That way, if your old home doesn't sell as quickly as you hoped it would be a great way to complete the purchase and step back from the deal.