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What happens if you pay your mortgage late?

Understand more about our grace periods and late fees

Making a late payment on your mortgage can cause complications. If your payment to Freedom Mortgage is going to be late because of financial hardship or other difficulties, here’s what you need to know!

What is the grace period for late payments at Freedom Mortgage?

At Freedom Mortgage, the typical grace period is 15 calendar days after your payment due date. This means that the payment must be made by the end of the day on the 16th day from the due date to avoid incurring a late fee. Specific information about your grace period can be found on your monthly billing statement. Mailed payments are credited based on the date of receipt. They are not credited using the mailing or postage date.

When are Freedom Mortgages payments credited?

Your mortgage payments must be received prior to 11 PM Eastern Time to be counted as a same day payment. Business days for the purpose of processing payments are Monday through Friday. Information about late payments is furnished to the Credit Reporting Agencies (CRAs) based on the payment effective date, not the payment posted date.

This means that if the last day of your grace period is on a Saturday and you make a payment on that day (prior to your cutoff at 10:59 PM Eastern Time) your payment will be processed on the following Monday. In this scenario you will avoid a late fee. This is because your payment has Saturday as a ‘payment effective’ date which is how it avoids late charge.

If you were to make the payment on Saturday at 11:00 PM Eastern Time, it would still be processed on the following Monday, but it would incur a late fee.

Is it okay to make a mortgage payment during a grace period?

If you make your mortgage payment during a grace period, you will avoid a late fee. If you make a payment after your grace period ends, you will incur a late fee.

What happens if you make a late mortgage payment?

In addition to the potential for late charges to be assessed, the Fair Credit Reporting Act requires that accurate information is furnished to the Credit Reporting Agencies (CRAs). Account information is furnished to the CRAs monthly, pertaining the status of the loan at the end of the prior month. As such, if the payment is not received in the month due, the loan status furnished to the CRAs will reflect the late payment.

How are mortgage late fees calculated?

The late fee calculation varies and is determined based on the terms of your loan. Your billing statement also includes the amount of the late fee (if any) that will be assessed if your payment is received after the grace period.

What if you can’t make your mortgage payment?

If you are unable to make your mortgage payment, please contact us as soon as possible. You may qualify for temporary or long-term relief. Freedom Mortgage’s assistance programs include:

  • Reinstatement, where you pay the total ‘past due‘ amount if you are able.
  • Repayment plans, which allow you to pay back the total ‘past due’ amount over time in addition to your monthly payments.
  • Forbearance, a short-term plan that reduces or suspends your mortgage payments for specific situations like the COVID-19 pandemic and then pay back the total ‘past due’ amount at the end of the plan. Learn more about COVID-19 forbearance at Freedom Mortgage.
  • Loan modification, where you catch up on missed payments by working with your lender to change the terms of your loan (think adjusting the interest rate, your remaining number of payments, or your unpaid balance).

*Freedom Mortgage Corporation is not a financial advisor. The ideas outlined above are for informational purposes only, are not intended as investment or financial advice, and should not be construed as such.

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