Dear Dr. Don,

I owe current late charges on my mortgage (not enough to affect my credit). How might this affect me in terms of a mortgage refinance? What should I do?

— Tim Terms

Dear Tim,

If it didn’t hit your credit report, it doesn’t affect your credit score and won’t impact your refinancing. The gold standard here is “pays as agreed” and “never late.” Paying “late fees” on the mortgage without triggering a “late pay” is just a financial cost on your current mortgage, not a financial drag on your next one.

The first black mark on your credit report generally comes when you are more than 30 days late with the mortgage payment. After that, there are additional dings on your credit report for being more than 60 days late or 90 days late with a payment.

If your mortgage payment has a grace period, the late fees don’t kick in until after the grace period. Think of this like the warning track in the outfield of a baseball diamond. The wall is looming and you’ll have to be careful not to hit it, yet still make the catch and pay your mortgage before it is 30 days late.

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