What if I make my mortgage payment late?

Missing a mortgage payment or making a mortgage payment never has a good outcome. How late your mortgage payment is and what you do in the meantime can change how bad the impact is on your credit score and foreclosure alternative options. As a general rule of thumb, you want to get in touch with your mortgage servicer as soon as you anticipate that you’ll have trouble making a payment. Don’t wait until it’s too late. While the terms vary from state to state and lender to lender, the time-line is generally as follows.

Mortgage Payment Less than 15 Days Late

Most mortgage lenders allow a grace period before charging a late fee. This doesn’t mean that you can consistently wait until day 14 to pay your mortgage payment, it just means that you won’t have a late fee levied for an occasional mortgage payment that’s just a few days late. Don’t rely on the grace period - if you are having trouble making mortgage payments on the predetermined due date, perhaps due to your salary schedule or the day you receive your paycheck, talk with your mortgage lender about moving the due date.

Mortgage Payment More than 15 Days Late

After 15 days, your mortgage lender can charge you a late fee. Late fees vary depending on your loan terms, but they’ll be disclosed in your loan documents pursuant to the Truth in Lending Act. The typical late fee is about 5% of the payment. So, if you’re 15 days late on a $1,000 mortgage payment, you’ll have to pay $50 in late fees.

Mortgage Payment More than 30 Days Late

If your mortgage payment is more than 30 days late, your mortgage company will likely notify the credit reporting bureaus. This will reduce your credit score and remain on your credit history for 12 to 24 months.

Mortgage Payment More than 60 Days Late

Most mortgage companies wait at least 120 days before initiating a foreclosure, but some will begin foreclosing on your home after 60 days of mortgage payment delinquency.

Mortgage Payment More than 90 Days or 120 Days Late

As the months drag on, your credit score will take harder and harder hits and the probability of foreclosure increases. At this point, you have very few options for getting out of your situation.

Aside from the damage to your credit score and the threat of foreclosure, waiting too long to seek mortgage assistance has detrimental effects because it often makes you ineligible for certain forms of FHA foreclosure assistance. Most federal mortgage assistance programs or mortgage loan modification programs will not offer assistance if you are not current on your mortgage payments. Get in touch with your mortgage lender or FHA office sooner, rather than later.