When is it considered late?

lbrodeur1965 · Joined: 21 Dec 2008 Posts: 7 3.81 Dollars($)

I hear everyone talking about they are late and you have to be late on your mortgage... when is it officially late? 30 days ? I have been 26-28 days late for several months now... won't my bank look at my payment history and see that we are struggling with this payment?

jameshogg · Posted: Wed Dec 24, 2008 9:31 pm Post subject:

Hi lbrodeur,

As far as I know, lenders give a grace period of 15 days if you are not able to pay on the due date. However if you cannot pay within the 15 days, then it will be considered as a late payment. Late payments can badly affect a person's credit score.

If you are 30 days late often, then the lender may report it as "currently 30 days late". This can damage your credit report. Otherwise, a 30-day late payment will not cause lasting damage. Similarly, if you are often 60 days late, then the lender may report is as "currently 60 days late." Otherwise, it will not cause long term damage. In case of a 90 days late, your credit scores will be damaged and it will remain on your credit report for 7 years. 120+ days late will also have an impact to your scores. In this case, your debt is usually "charged off" or sold to a 3rd party collection agency. Both of these occurrences are reported on your credit files and will lower your credit scores further.

The banks want to recover their debts. So I don't think they will look into the fact that you are struggling with payments.

Wish you a Merry Christmas.

Thanks

gmakerley · Posted: Fri Dec 26, 2008 8:38 am Post subject:

a payment is late if not paid on the due date - that's the reality of all loan situations.

grace periods are simply that - a period of time during which no penalty is attached to the late payment.

there is no detriment to using the grace period, as no lender is going to report a late payment to a creditor until it hits that 30-day mark. if your payment is due 12/1/2008, for example, and you make the payment on 1/1/2009; then bingo, you are 30 days late and that will be so reported to credit reporting agencies.

lenders are not about to begin legal action on a 30-day late account. however, they will definitely be pro-active in seeking payment, especially in these times.

jveenstra · Posted: Fri Dec 26, 2008 9:22 am Post subject: Late

Above is all correct and good information.
Most mortgages are due on the first of the month.
You may pay until the 15th 0r 16th and not incur a late charge.
If you pay after the 16th, you incur a late charge, however, that late payment is not reported to the credit bureau as a late payment until it is 30 days late.One could pay betwenn the 15th and th 30th of every month
and incur a late charge every mont and never have a late payment show up on the credit report.
If one consistently pays after the 15th they would be considered not a good risk if a new lender found our about and sometimes they do if they get a Verification of Mortgage from the lender rather than the credit report and it happens to show late charges due or paid.

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