Grace Period

Sam · Posted: Thu May 27, 2004 10:54 pm Post subject: Grace Period

Grace period refers to the time period between the due date of a mortgage payment and the day on which the lender charges late fees. Usually grace period covers a time frame of 15 days. Mortgage payments are generally due on the first day of the month and delinquent on the 15th.

Grace periods are applicable in case of mortgages on which the interest is calculated on a monthly basis and not those on which the interest accrues daily. The period is notified in the mortgage note as a part of the terms of the loan agreement.

The grace period gives borrowers some more time to clear off their mortgage dues. Thus, they can avoid late fees and any accrued interest on account of delay in payment.

All times are GMT - 7 Hours

Page 1 of 1