Thursday, November 26th, 2009

What would being 2 weeks late on a mortgage payment do to my credit?

late payment
Justin asked:


My mortgage is due the 1st of every month and I pay it with my first byweekly paycheck which is sometimes on the 15th. I always pay before the late payment fee is assesed. Will this hurt my credit score as long as I keep paying before the late fee date?

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4 Responses to “What would being 2 weeks late on a mortgage payment do to my credit?”

Mr. Prefect Says:
November 27th, 2009 at 3:15 am

There is always a grace period of approx. 2 weeks, so you are not late paying this bill, BUT, when all is said and done, and you move foreward to another getting additional credit, it “might” be noted somewhere in your credit files, that although you were never late, you still didn’t pay “on time”.

Tim Says:
November 28th, 2009 at 5:21 am

yes it is still late even if you don;t get chanred extra. Sorry but the due date is the due date.

SPIFIMAN1 Says:
November 30th, 2009 at 2:52 am

No late payment can be reported to the credit bureaus unless that are 30 or more days late so as long as your paying the late fees you fine credit wise.

You should contact your lender and see if you can get you due date changed so you can avoid the late fees.

Suzette Jamieson Says:
November 30th, 2009 at 3:38 am

Justin,

You are walking a thin line with the payment system you have set up. While the mortgage company won’t necessarily be reporting you late, the fact that you often pay so close to your due date can get you into hot water.

If something went wrong and your check didn’t get to your mortgage company by the 15th, or something happened at your bank or with your employer and the money wasn’t in your account when you expected it to be, you will get hit with a late fee at the very least.

Once you screw up with one creditor, the others have a way of finding out about it … especially now that the financial industry is trying to recoup from bad decisions in the past. If nothing else, your mortgage company would know you had screwed up once … and would be waiting for you to do so again.

Here are a couple of suggestions -

1. Since you are paid bi-weekly, you have a couple of “extra” paychecks each year. The next time you have a 3-payday month, put that check into a savings account and then use it when you’re running too close to your due date. Then when you get your next paycheck (the one that is close to the 15th), replace what you took from the savings account. After you get your 2nd 3-payday month, do the same thing and then you will always have enough “extra” on hand to make your mortgage payment by the 1st of every month.

2. It sounds like you have NO savings … which in and of itself is risky. I would suggest building up a savings account to cover issues like this as well as to be prepared for the inevitable emergency or home repair that comes with being a homeowner. Selling things you have that you no longer need or use will give you a chunk of money to get you started. But most likely you need to evaluate the way you spend money day in and day out and find some “leaks” in your expenses that you can re-direct into a safety net savings account.

It’s all about the little things … they can get you into trouble financially OR they can keep you from drowning in debt. The sooner you take action, the less likely things will get out of control.

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