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
Know When 'Late' Really Means Late
Confused about mortgage payment deadlines and penalties? Get clear answers and avoid unnecessary fees. We're here to guide you through every step.
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.
If you have any questions about this or if you have any questions you'd like us to answer on our podcast, you can submit your questions using our contact form or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We'll personally work with you and help you through the whole process.
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Be sure to ask us for a free quote on your next mortgage. We'll personally work with you and help you through the whole process.
Mortgage Brothers 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 accounting advisors before engaging in any transaction. Mortgage Brothers NMLS 1007154, NMLS #210917 and 1618695. Equal Housing Opportunity.
Explore more mortgage insights by checking out our guide on PMI costs, learning the basics of amortization, and discovering what sparks trigger leads. You can also read about APR basics, understand closing costs, and learn why mortgage payoff can exceed balance.
Transcript of the Mortgage Brothers Podcast
Eddie Knoell: I'm Eddie Knoell.
Tom Knoell: And I'm Tom Knoell. Welcome, everyone! This is the Mortgage Brothers Podcast. Today, we're answering a question we've been asked many times:
Eddie: "When is my mortgage payment late? When is it considered late?"
Tom: Right. "When is it actually due?"
When Are Mortgage Payments Due? [00:30]
Eddie: It's one of those "cup is half full or half empty" situations. Late or due—it's a matter of semantics, but it's a very good, common-sense question. So, when is it due?
Tom: Every mortgage payment is due on the first of the month. Not the second, not the fifth. Unlike car or credit card payments, where the due date might vary, mortgage payments are always due on the first.
Eddie: Can you call up your lender and say, "Hey, I want my payment due on the 13th of every month because it's my birthday?" No bank I know allows that. Mortgage payments are always due on the first.
When Is It Late? [01:42]
Eddie: So, the question is: When is it late?
Tom: There are two perspectives to consider:
- When the bank considers it late.
- When the credit bureau considers it late.
Eddie: Actually, let's add a third: when people feel late. For some, if they haven't paid by the first, they feel anxious.
Grace Period: Payments After the 15th [02:16]
Tom: According to the lender, payments aren't late until after the 15th.
- If your payment arrives on the 15th, there's no penalty.
- After the 15th, most banks will charge a late fee, typically 5% of your monthly payment.
Eddie: For example, if your mortgage payment is $2,000, you'd pay a $100 late fee.
Credit Bureau Reporting: 30 Days Late [05:02]
Tom: Credit bureaus don't report anything until the payment is 30 days overdue. For instance:
- If your October payment isn't made by October 31st, it's considered "30 days late."
- At this point, it's reported to the bureaus, and your credit score takes a hit.
Eddie: And trust me, folks, this is a big deal. A 30-day late payment impacts your credit significantly.
Escalation: 60 Days, 90 Days, and Foreclosure [06:08]
Tom: After 30 days, the consequences escalate:
- 60 days late: A bigger hit to your credit.
- 90 days late: Foreclosure proceedings may begin.
Eddie: In Arizona, for example, after 90 days of non-payment, the foreclosure process starts. Each state has its own laws, but the bottom line is: Avoid going beyond 30 days late if possible.
Rolling Lates: A Dangerous Cycle [07:29]
Eddie: Missing one payment can lead to rolling lates if you don't catch up. For instance, someone with one "30-day late" could end up with several if they continue to miss deadlines.
Tom: That's a huge red flag for lenders and can severely impact your chances of getting approved for future loans.
Advice for Borrowers [08:57]
Eddie: So, what should borrowers do if they've had late payments?
Tom: Be upfront with your loan officer. If you have late payments in your history, let them know. It helps them focus on solutions and avoid wasting time.
Eddie: Exactly. "Hi, I'm Dan, and I have two late payments." [Laughter] Just tell us, and we'll help.
Final Thoughts [10:03]
Tom: Thanks for tuning in, folks!
Eddie: And remember, you can always reach out to us for questions or quotes on your next mortgage. Have a great day!