What happens when you are late on a mortgage payment? It depends on how late.
The late charge provision in a mortgage calls for an additional charge if you are late on your mortgage payment beyond the grace period.
The grace period on a mortgage payment varies based on the policy of your lender, but three minimum grace period on a one-to-four unit, owner-occupied residential property is is ten days after the due date.
The amount of a late charge fee varies by loan type and lender. For example, VA loans limit the late charge to 4% of the payment. Conventional loans can have a fee as high as 6% of the payment due.
How can you verify the length of the grace period and late charge amount
To verify the length of the grace period and the late charge you can
- Check your mortgage statement. It will tell show you the date when you payment is considered late as well as the amount you can expect to pay
- Check the “Note” which is part of the final loan documents you signed. It will show also show the number of days of grace period and late fee charge percentage
What if you are more than 30 days late on a mortgage payment?
Lenders have the right to report the late payments to credit bureaus if you do not pay within 30 days of the due date.
This is when your credit history and credit scores will be affected.
Additional or rolling late payments will be reported individually to the credit bureaus as well.