What Constitutes a Late Mortgage Payment?

A late mortgage payment can damage your credit score.

A late mortgage payment can damage your credit score.

You sent your mortgage payment in after its official due date. But is it really late? You might be surprised. A late mortgage payment isn't always so easy to define. Most mortgage lenders offer grace periods, giving homeowners a chance to make their mortgage payments without penalty even if they send them in after their "official" due date.

Missing Your Due Date

If you mail your mortgage payment after its official due date, don't panic. While your payment will technically be late, you might not suffer any negative consequences. Many mortgage lenders -- though not all -- offer a grace period ranging from 15 to 30 days. As long as they receive your payment during this grace period, they won't charge you a late fee or report your payment as late to the credit bureaus.

After 30 Days

If your payment is late by more than 30 days, though, expect to receive a written notice from your lender. Your lender will also assess a penalty fee -- which varies depending upon your mortgage agreement -- and report your payment as late to the three national credit bureaus, TransUnion, Experian and Equifax.

The Damage

Your credit score will tumble when lenders report your mortgage as officially late. Financial institutions of all kind, whether they're passing out mortgages, car loans or credit cards, use your credit score to determine whether you are financially stable enough to qualify for a loan or credit card. They also rely on your scores to determine your interest rate. Most lenders give their lowest interest rates to borrowers with credit scores of 740 or higher on the FICO scale. If your score is below 620, you might struggle to qualify for loans or credit.

Falling Scores

Fair Isaac Corp., creator of the FICO credit score, in 2011 reported on just how steeply credit scores fall when borrowers are officially late on their mortgage payments. According to FICO, if your score stands at 680 before your late payment, it will fall to between 600 and 620 if you are 30 days late on your mortgage. If your score started at 780, it would fall to the 670-to-690 range if you are 30 days late on your mortgage payment.

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About the Author

Don Rafner has been writing professionally since 1992, with work published in "The Washington Post," "Chicago Tribune," "Phoenix Magazine" and several trade magazines. He is also the managing editor of "Midwest Real Estate News." He specializes in writing about mortgage lending, personal finance, business and real-estate topics. He holds a Bachelor of Arts in journalism from the University of Illinois.

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