Is Paying My Mortgage During a Grace Period Considered Late?

Mortgage companies typically have a grace period for paying your mortgage. Some lenders allow 10 days from the due date while others allow as much as 16 days. If the payment location for your mortgage is in the same city as your residence, you can reasonably expect your payment to reach it in one or two days. If your mortgage company is on the opposite side of the country, you can expect your lender to receive your payment anywhere from two to six days after you mail it. This cuts into your grace period considerably.

Grace Period

If your lender receives your payment during the grace period it is not considered late. You can usually mail your payment on the due date and expect your lender to receive it during the grace period. If the company receives your payment after the grace period, but less than 30 days after the due date it will be late and your lender will charge you a late fee. If it does not receive your payment until the date the next payment is due, or later, the payment is delinquent, and you will be charged a late fee.

Credit Reporting

Paying a late fee does not mean that the lender will report you as late to the credit bureaus. You are not late as far as the credit bureaus are concerned until you are at least 30 days past your due date. You want to avoid a 30-day late mortgage payment on your credit report. It will drastically lower your credit score and it will take several months for it to move up again.

Options

Most mortgage lenders will arrange to have your payment deducted from your checking account automatically. This will ensure that you do not have to pay a late charge or have a late payment on your credit report. Alternately, most banks now have automatic notification when your payment is due. This is available through an automated system that will send you an email several days before your payment is due.

Considerations

Consider ordering a copy of your credit report on a regular basis to ensure that there are no errors. You can obtain a free copy from each of the three bureaus once a year. If you alternate between each bureau every four months, you can be sure that the reports will remain accurate. If there are any errors, you can request that the bureau correct them. If the credit agency verifies the error, it will send you a corrected report.

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