When is a mortgage payment considered late?

Understanding when a mortgage payment is considered late is crucial for maintaining financial stability and avoiding potential penalties. If you’re having financial trouble and are worried about making a late mortgage payment, know that most mortgage companies offer a 15-day grace period. However, once you’re past the 15-day mark, the timing of payments and consequences can get tricky.

When is a mortgage payment late?

Most homeowners make their mortgage payments on the first day of the month. However, there is typically no late mortgage payment penalty as long as you pay within the first 15 days of the month.

Late mortgage payment timeline

Here’s a timeline you should be aware of if you’re struggling to make your mortgage payments on time.

15 days past due

If you can’t make your mortgage payment on the first of the month, most lenders will give you a grace period of 15 days. Once 15 days have passed, your lender will typically charge a late fee. You can find out what this late fee will be by looking at your mortgage documents. According to Experian, fees range from 3% to 6% of the total overdue payment.  

30 days past due

After your mortgage payment is 30 days late, your missed payments get reported to credit bureaus, which negatively impacts your credit. Unfortunately, late payments remain on your credit report for seven years.

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At the 36-day mark, U.S. federal law states that your provider must attempt to contact you about your missed payment. If they cannot contact you, they may send a notice of default, a statement outlining failure to pay. The notice of default is considered the first step toward foreclosure. You then have 30 days to pay the balance you owe, in addition to interest and fees, in full.

45 to 60 days past due

If you still haven’t made your mortgage payment after forty-five days, federal law states that your lender must assign someone to work on your case. You will receive written notice of their assignment and can expect an introduction shortly after. They are responsible for informing you of available assistance options and answering any questions you may have.

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At sixty days late, if you haven’t worked out a payment plan with your lender, your two missed mortgage payments will be noted on your credit report and stay in your payment history. Your lender will also charge additional late fees. At this point, you can expect your lender to contact you by phone and mail to discuss late payments.

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While it can feel intimidating to answer the phone and speak to your lender, your best option is to work with them to find a solution.

90 to 120 days past due

After three missed payments or 90 days late, most states allow your loan servicer to initiate the foreclose process on your property. To do this, they will send what’s known as a “Notice to Accelerate,” which is essentially your last warning before they move into foreclosure. In the notice, your lender will ask for the entire balance on the loan before you default.

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The exact timeline for a foreclosure on your property differs depending on the state. Be sure to visit your state’s foreclosure law to see how it works.

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At 120 days late, if no arrangements for payment have been made by the deadline provided in your Notice to Accelerate, your home will go into foreclosure. Depending on the state, you’ll either get a notice by mail or a note taped to your front door.

Options if your mortgage is delinquent

It’s not too late to fix things if your mortgage has gone into delinquency. Here are a few things you can do:

Communicate with your lender

Some people leave this step until last, but the more proactive you can be, the better your options will be. Your mortgage servicer likely doesn’t want to call collections or foreclose, so they have a strong incentive to work with you.

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Options to avoid foreclosure can include:

• Forbearance – Negotiating a temporary break from making payments during short-term setbacks such as job losses or natural disasters.
• Repayment plan – Making up your overdue payments by splitting them up and adding them to your monthly mortgage payments over several months.
• Loan modification – A permanent change to your loan to make it more affordable without having to refinance, such as with lower interest rates or increased loan term lengths.

Look into repayment assistance programs

There are many organizations, including ones run by state and local governments as well as nonprofits, that can assist in repaying your mortgage - especially if you're experiencing financial hardship.

Refinance

While it’s possible to refinance, it can be difficult if you’ve recently missed payments. Still, you can ask your lender if it’s a possibility, which can provide a short-term solution to help you get back on your feet.

Rent your property

One way to earn some extra cash is by renting all or part of the property, depending on what’s feasible for you. Many people can easily rent out garage space, basements, or even a spare room. You can also consider options like turning part or all of your property into an Airbnb. Renting can provide much-needed additional income to help you catch up on your mortgage payments.

Leverage your equity

Refinancing may be difficult due to missed payments, but you can still leverage your home wealth through other equity solutions. Products like a home equity investment or HELOC have more flexibility, allowing you to tap into what you need.  

Sell your home

A simple way out of a delinquent mortgage is to sell your home. Then, you can consider downsizing or renting. Doing so can help you avoid foreclosure, which damages your credit score. As an added bonus, you’ll have extra cash if you sell your home for more than what you owe.

Use a deed in lieu of foreclosure

One final option is giving up your deed to the home to your lender, forgoing all equity you have in exchange for paying off the remaining balance on your home. Your lender then technically owns your home, but some allow you to remain in it for the time being.

Frequently asked questions

When does a late mortgage payment get reported?

Mortgage payments are typically reported as late to credit bureaus once they are 30 days past due, staying on your credit report for seven years. This means that if you pay your mortgage a few days or even a couple of weeks late but still fall within the grace period or just outside of it, it likely won't be reported as delinquent on your credit report. However, late fees may still apply based on your lender's policy.

How far behind can you be on a mortgage payment?

The timeline for falling behind on a mortgage payment varies, but missed payments can have serious consequences. After 30 days, the missed payment is typically reported to credit bureaus, resulting in a credit score drop. At 60 or 90 days past due, late fees and penalties increase, and the risk of foreclosure rises. Many lenders initiate foreclosure proceedings after 90 days of non-payment, though this depends on your loan agreement and state laws.

Final thoughts

Navigating the challenges of delinquent mortgage payments requires a proactive approach and a clear understanding of the available options. The first step is always to get into early communication with your lender. It’s perhaps the best way to start working towards a solution, as they can provide options like forbearance, repayment plans, or loan modification to avoid foreclosure.

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