What Constitutes a Late Mortgage Payment?

When you're just a few days late making your mortgage payment, you might wonder if your lender will charge you a late fee and if it will impact your credit negatively. While any payment after the due date is technically considered late, the good news is that lenders typically give borrowers a grace period of as much as 30 days before you're charged a late fee. If you don't get current during the grace period, though, be warned that late mortgage payment consequences can range from incurring late fees and extra interest to losing your home entirely.

TL;DR (Too Long; Didn't Read)

Any payment you make after your mortgage's due date is technically late. However, your lender likely gives you a grace period of up to 30 days during which you can make your payment without a late fee or negative impact on your credit report.

Mortgage Payment During Grace Period

Although a monthly mortgage payment due date usually falls on the first of the month, lenders will often offer a mortgage payment grace period. This usually gives you 10, 15 or 30 days after the official due date during which you can make a late payment and not be subject to a late penalty or hit to your credit score. You can ask your lender about the grace period or check your loan documentation for the terms and conditions.

Although having this grace period can give you peace of mind that you can pay a bit late during an emergency, your lender doesn't intend for it to become a regular thing. In fact, your lender may allow interest to accrue on the payment amount until you pay up.

Late Mortgage Payment Consequences

When your lender's grace period runs out and you haven't paid up, you'll be subject to a late mortgage payment fee, which usually is a percentage of your payment's principal plus interest – often 5 percent. However, once you're 30 days late on the loan, your lender can send information about the missed payment to the three credit bureaus and will likely contact you about the problem. Not only will the late payment hurt your credit score, but it remains on your credit report for seven years; this can make it harder for you to get credit elsewhere when you need it.

If you've hit 36 days late and haven't made contact with your lender, you may receive a Notice of Default that asks you to pay the owed amount within 30 days or else face potential foreclosure. To avoid further trouble, reach out to your lender to get help with a repayment plan. It's best to communicate with your lender early on when you know you can't make your payment to get back on track. In fact, once your payment is 45 days late, your lender has to legally assign someone to discuss assistance options with you.

While you're accruing late fees the whole time, you also risk losing your home once you're three months late or more. Your lender usually will send you a letter asking for the missed payment money or else threaten to foreclose on your home; state laws vary on the exact time point for this. If you still aren't making payments by the 120-day mark, your house will typically be subject to a foreclosure sale. At that point, you'll need to make arrangements with the lender before the sale happens or else forfeit your house.

Late Payment Assistance Options

As soon as you know you'll be late making your mortgage payment, call or visit your lender and explain why you can't make your payments. Lenders often will work out a payment plan if you can submit documentation that shows a significant hardship such as having a major health problem, losing your job or otherwise not being able to pay your daily living expenses. You may be able to take advantage of other options like loan modification so that you can keep your home and have more affordable payments.

If your payment shows as late yet you did pay it on time or within the grace period, you may be eligible for late mortgage payment forgiveness if you dispute the error with your lender. This can also help you get back late fees and wipe the error off your credit report. You can also reach out to the credit bureaus and the Consumer Financial Protection Bureau if your lender falsely accuses you of making late payments and refuses to fix the problem.

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