When is a mortgage payment actually considered late?
So, the short answer is that every mortgage is due on the first of the month.
Now, where it gets a little trickier is that there are two different ways to think about if it’s late:
When the bank thinks that you’re late
When the credit bureau thinks you’re late
When the bank or lender thinks you’re late
Now, the lender doesn’t consider your payment late until after the 15th. If they receive payments within the first 15 days, you’re in the clear. There’s no penalty during this time.
But what happens if you’re late?
What happens if your payment goes out on the 16th? In most cases, the bank will assign you an additional fee of 5% of your loan payment. Nothing will happen to your credit.
When the credit bureau thinks you’re late
The credit bureau will consider you late if your payment is received after 30 days, the moment it is a month over. If there are 31 days in the month that doesn’t matter, it needs to be received by within 30 days. If your payment is late, they’ll give you a “30 day late” on your credit report, which is not something you want at all. And if you’re 90 days late on a mortgage, likely foreclosure proceedings will have started. Now, each state has different laws on foreclosure proceedings, but in Arizona, it’s at 90 days that you’re served. And then you only have 90 days after you're served before your foreclosure proceedings will start.
If you have one 30-day late on your credit it’s not impossible to still get approved for new loans in the future, but it will make it a bit harder.
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Thanks for listening and reading the Mortgage Brothers Show. Let us know if you have any questions you’d like us to answer on this podcast. You can email your questions to tom@AZMortgageBrothers.com or Eddie@AZMortgageBrothers.com.
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Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and
