Late Mortgage Payment: What You Need To Know 

If you fall behind on your mortgage payments for the first time, you can still make a late mortgage payment to recoup your lender for the money you owe them. Of course, late mortgage payments should be avoided because of all the strings attached and the potential consequences that come with them.

Let’s detail everything you need to know about late mortgage payments.

When Is a Mortgage Payment Late?

Technically, a mortgage payment is only late if you don't make it by the time the mortgage grace period ends. For most lenders, this is 15 days after a mortgage payment is due, but this heavily depends on the mortgage company that holds your loan. 

For instance, if your mortgage payments are due on the first of the month, you often have until the 16th to make the payment on time. If you don’t make your payment, your mortgagor may mark the payment as late and inform the credit bureaus about the issue. This can affect your immediate financial flexibility and your long-term financial future.

If you pay your mortgage bill long past the due date, you’ll face a late fee from your loan servicer. Other penalties could apply as well, like a negative impact on your credit report and inability to qualify for good credit cards in the future. 

You should always pay attention to your monthly mortgage payment because you don't want to fall behind and pay the penalties that accompany a delinquency

What Happens When You Have a Late Mortgage Payment?

If you have a late mortgage payment, you could face several severe consequences if the delinquency is not remedied.

Credit Score Hit

In either case, a late mortgage payment can almost immediately translate to a credit score decrease. Your mortgagor will tell the credit bureaus that you didn’t make a mortgage payment on time, which can significantly downgrade your FICO score.

In the long run, that might make it difficult for you to qualify for other loans in the future. The credit score penalty will become worse and worse the longer your payment remains late or your mortgage remains in default.

The last thing you want to do is completely tank your credit history because of a missed mortgage payment or bad payment history. It can significantly impact your real estate options in the future and make it difficult to acquire other loan instruments, like a refinance loan.

Risk of Foreclosure

Then there’s the risk of foreclosure proceedings. If your late payment goes on long enough, your mortgage lender may begin foreclosure. If the foreclosure is completed, you'll be forced to leave your property, your credit score will drop, and it will be nearly impossible to qualify for another loan or mortgage for the next several years.

Lenders are required to send warning letters, letting the borrower know that they are delinquent. It is important for you to reach out to your lender immediately once you fall behind. You should not wait for the lender to start discussing foreclosure. The sooner you speak with your lender, the stronger your chances of qualifying for a loan modification or forbearance agreement.

Are Late Mortgage Payments Serious?

Absolutely. One late mortgage payment is bad enough because it is a delinquency toward your loan and credit report and can snowball quickly. If several late mortgage payments pile up, you could face serious trouble in the immediate future.

No matter who your mortgage lender happens to be, all lenders want you to repay any money you owe ASAP. The more late payments pile up, the more money you owe to your lender, and the more difficult it will be to pay back all that cash on time.

This is especially true if you enter a forbearance agreement with your mortgage lender. For instance, if you agree to pay back all the money you owe from four months of postponed mortgage payments, you’ll owe five or more months’ worth of mortgage payments at some point in the future!

Due to the potential setbacks a late payment may cause, it is imperative that you keep up with your mortgage payments. The longer the delinquency sits and grows, the harder it will be to catch back up.

How To Avoid Late Mortgage Payments

When looking into homeownership, it is important to understand how a loan works and the potential penalties you may face if you fall behind.

There are many ways to try and ensure that you are making a smart decision when purchasing your home and entering into a mortgage agreement. For example:

  • Only take out a loan you can afford. Speak with a financial officer extensively about mortgage repayment strategies and ensure you have a good grasp of your finances before signing any dotted lines.
  • If you have already purchased a home and are struggling to make your mortgage payments, it is important to start looking for options right away.
  • If you think you won’t be able to make mortgage payments for a little while, talk to your lender ASAP. They may be willing to work with you through forbearance or loan modifications to avoid foreclosure.

In addition to those strategies, you can avoid late mortgage payments by swapping out your mortgage entirely for a co-ownership strategy with Balance. Contact us, and we will pay off your mortgage and replace your mortgage payments with basic monthly payments to us that cover your share of property taxes and insurance in addition to your exclusive occupancy of the home.

We’ll also invest in a portion of your home’s equity and future appreciation. You’ll get a lump sum for your trouble and always have the right to buy us out of that equity later down the road if you desire. It’s a great way to avoid late mortgage payments, keep your home, and remain a homeowner for years to come with maximum flexibility.

Contact Balance Today

When you work with Balance, you are able to free yourself of the delinquent mortgage debt. In addition to saving your home, Balance gives you the opportunity to fix your financial health by consolidating debt and helping you build back your credit.

Contact us today to learn more.


Do Mortgages Have a Grace Period? | Experian

The consequences of missing a mortgage payment are more than just a lower credit score — here's what can happen | CNBC

What Is a FICO Score? | Investopedia

Learn about forbearance | Consumer Financial Protection Bureau