What Is the Grace Period for a Mortgage Payment?

Mortgages often come with a grace period—a specific time after your due date when you can still make your monthly mortgage payment without incurring a late fee. This grace period can be a lifesaver when unexpected circumstances delay your payment. Typically, mortgage payments are due on the first of the month, and the grace period usually extends for about 15 days. This means if your payment is due on the first, you have until the 16th to make your payment without penalty.

It’s crucial to review your mortgage contract to understand the exact terms of your grace period. If you’re unsure, contact your lender for clarification.

Is It OK to Pay Your Mortgage During the Grace Period?

Yes, it is acceptable to pay your mortgage during the grace period. The grace period is designed to provide flexibility in case you miss the due date. However, relying on this extra time regularly can be risky. Delays in mail or bank processing can push your payment past the grace period, resulting in a late fee.

To avoid this, aim to make your payments on or before the due date. Setting up autopay can help ensure timely payments, positively impacting your credit score. Remember, your payment history is a significant factor in your FICO® Score, which is used by 90% of top lenders.

What Happens if You Make a Late Mortgage Payment?

Late Payment Penalties

If your payment is received after the grace period, your lender will likely charge a late fee. For example, a 5% late fee on a $1,000 payment would cost you an additional $50. These fees can accumulate, making it harder to catch up on payments.

Credit Score Damage

Once your payment is over 30 days late, your credit score could drop significantly. Lenders report delinquencies to credit bureaus, and since payment history accounts for 35% of your credit score, each late payment can severely harm your score. Late payments can stay on your credit report for up to seven years.

Serious Payment Delinquencies Risk Foreclosure

If you become seriously delinquent, you risk foreclosure. Federal law requires your loan servicer to contact you to discuss options once your payment is 36 days late. They must mail your loss mitigation options before your payment is 45 days late. Foreclosure warnings begin at 90 days delinquent, and foreclosure may start at 120 days late.

Protect Your Payment History and Credit Score

While grace periods offer some leeway, it’s best to make timely payments to avoid late fees and protect your credit score. Regularly check your credit report to ensure there are no inaccuracies. Consider setting up automatic payments to help ensure you never miss a payment.

For expert mortgage services, contact O1ne Mortgage at 213-732-3074. Our team is here to help you navigate your mortgage needs and ensure you stay on track with your payments.