Late Mortgage Payment In Past 12 Months Lending Guidelines


This BLOG On Late Mortgage Payment In Past 12 Months Was UPDATED And PUBLISHED On October 3rd, 2019

Late Mortgage Payment
Gustan Cho Associates

Late Mortgage Payment needs to be avoided at all costs.

  • A late mortgage payment is considered any late mortgage payment that has been 30 or more days late

Late mortgage payment will be reported on all three credit reporting agencies:

How Long Bad Credit Reports On Credit Bureaus

How Long Bad Credit Reports On Credit Bureaus

All reporting history on credit bureaus will remain on credit report for 7 years from date of last activity.

  • There may be extenuating circumstances
  • Some unexpected bills may have come up and consumers may be short of paying their mortgage payment and may need a little time
  • Before making late mortgage payment, contact mortgage loan provider and talk to them if there are any arrangements that can be made
  • See if the mortgage company can give a one time reprieve where the mortgage loan servicer will not report 30 days late on the three credit reporting agency

Every lender have their own policies in reporting the payment history of their borrowers. Some lenders can work things out with borrowers when it comes to a late payment.

Grace Period Given By Creditors

What is Late Mortgage Payment And Grace Period

Homeowners with a current home loan, their mortgage payment is due on the first of every month.

  • However, lenders will give a grace period of 15 days to pay mortgage payment
  • Will consider it on time as long as homeowners pay by the 30th and/or 31st of the month
  • Payments received on the 16th and up to the end of the month will be assessed a late charge
  • But will not be reported on the credit reporting agencies
  • Monthly late payment charges is normally 5% of the monthly payment amount due
  • Borrowers with only one late mortgage payment in a year and if paid before it is 30 or more days late, borrowers can request servicer if they can waive the late charge
  • Most lenders will waive one or two late charges per year for on time payers
  • If payment is not received by the 30th or 31st of the month and is received the following month, there will b a 30 day late payment that will be reported on credit report

This is what consumers want to avoid at all possible costs.

Credit Impact On Late Payments

What effect does the loan have on late mortgage payments?

As long as mortgage payments is not more than 30 days late, there will be no impact on credit.

  • However, one late mortgage payment will definitely not only plummet credit scores but will have negative consequences in obtaining a home loan
  • Derogatory credit will remain on credit report for a period of 7 years
  • If planning on obtaining a new mortgage loan but have late payments on credit report, borrowers cannot qualify for a home loan with late mortgage payments in the past 12 months
  • Some lenders will not accept any mortgage loan applicants who had a 30 day late mortgage payment in the past 24 months
  • Late mortgage is one of the worst negative credit items consumers can have on credit report
  • Will definitely affect borrowers when trying to qualify for another home loan
  • If homeowners were to sell current home and purchase a new home, they will not be able to qualify for a new home loan with multiple late payments history in the past 12 months on their home

This holds true even if homeowners have sold their home and mortgage balance has been paid off. The good news is Gustan Cho Associates can help borrowers with late payments in the past 12 months. As long as the borrower can get an approve/eligible per AUS, GCA Mortgage Group can originate and fund the loan.

One Late Payment In Past 12 Months

What is one late mortgage payment in the last 12 months?

As mentioned earlier, many lenders have their own mortgage lender overlays when it comes to qualifying borrowers for a new mortgage loan with prior mortgage late payments. However, we can accept borrowers who had one late 30 day late payment on their home loan in the past 12 months. Some lenders will not accept any borrowers who had a mortgage late payment in the past 24 months or even 36 months. Mortgage late payments are taken extremely seriously by all lenders. Homeowners with a mortgage late payment and need to qualify for a home loan, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. We are available 7 days a week, evenings, weekends, and holidays. Borrowers can also email us at with any questions or want to go over any case scenarios.

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