When a person decides to buy real estate with the help of mortgage money, a lot of situations arise that require additional clarification. Despite the fact that penalties are prescribed in the contract, sometimes there is a need to clarify how they differ from each other. Indeed, even a punctual and responsible borrower may have unforeseen situations.
Penalties are the levels of monetary compensation stipulated and fixed in the contract, which are levied on a person for violation of contractual or contractual terms.
With regard to lending, they are most often assigned for untimely fulfillment of obligations, violation of the schedule for payment of funds. In the process of claiming the payment of the forfeit, the creditor has the right not to prove the existence of losses. Also, he cannot demand to pay penalties if the debtor is not responsible for the obligations taken.
Penalty - a type of forfeit that is applied in those cases and in the order established by the contract or the law. It is determined by the established amount or percentage of the total contractual obligation that has been violated. Penalties ensure the execution of the mortgage contract and are an appropriate measure of responsibility, which is provided for violation of obligations. Penalties are charged for a continuing offense and are more often expressed as a percentage of the total amount of the violated obligation. In some cases, it may be paid in a fixed amount.
Accordingly, the penalty is applied in two main forms: fine and penalty. The conditions associated with it are described in each loan or loan agreement.
There are situations when a borrower, due to circumstances, misses a monthly payment and the bank decides that these reasons are respectful. For example, when changing or losing a job, it is mandatory to independently warn the bank. This should be done before the organization itself makes a complaint to the borrower, since the attitude towards the subject will already be formed, it will be difficult to change it for the better in the future. So, in this situation, a delay in payment and on-lending is possible. However, it will be 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 depositing the required amount is disrespectful, according to the loan agreement, penalties are paid in the first place. Accordingly, upon making the next payment, the penalty will be covered first, and only then directly the loan. Therefore, it is worth making sure that the main monthly amount is complete, otherwise the fine and penalty will have to be paid for the next month.
In a situation where the violation of the terms of payment on the mortgage is systematic, the bank may require early repayment of the loan. Most often this happens if the borrower does not make payments on time and does not pay penalties under the contract three times during the year or the delay is more than 90 days.