A mortgage is a contract between a borrower and a lender in which the lender agrees to provide money upfront while the borrower agrees to repay the debt over time and with interest. As such, a borrower with late or missed payments can face penalties ranging from late fees to the loss of the home, which is collateral for the loan.

What happens if I miss a mortgage payment?

If you miss one mortgage payment, you’ll likely be contacted by your lender, but it’s unlikely your home will be foreclosed right away. You may receive a formal letter alerting you to the possible actions the lender may take. Do not disregard this notice — it’s a serious matter.

Although late payments are undesirable, they are often with little, if any, consequences. Many lenders have a 15-day grace period that allows borrowers to make payments after the due date without penalty.

If the payment is made after the due date — officially “late” — the lender is typically entitled to a late fee, generally a percentage, which is listed in your mortgage contract. If your monthly mortgage payment is $1,400, for example, a 5 percent late fee amounts to $70.

If you believe you’ll miss a mortgage payment, or already have, contact your lender or servicer as soon as possible. Your lender may offer you a forbearance or loan modification to help you through the hardship. If you’re going to be late making your payment but otherwise have good payment history, you can also ask your lender if they’ll waive the late fee.

How do missed mortgage payments impact my credit score?

Your lender can report missed payment to the credit reporting agencies, which can hurt your credit score. How many points you lose varies, but generally, the higher your score, the larger the reduction.

Credit score Missed mortgage payments Damage to score
Source: FICO
793 1 (30 days past-due) 63-83 points
710 1 (30 days past-due) 45-65 points
607 1 (30 days past-due) 17-37 points

Note that if a mortgage payment is late by a few days past the grace period, it won’t result in a negative mark on your credit report. The reason is that in order to be reported, the payment must be at least 30 days overdue.

How many mortgage payments can I miss before foreclosure?

If you fail to get in touch with your lender after you miss a payment, you may receive a notice of default, which is the earliest stage of the foreclosure process.

However, getting this notice doesn’t mean foreclosure is done deal. Delinquencies, even when three or more payments have been missed, can often be rectified. Avoiding foreclosure benefits both the borrower and the lender, so there’s good reason for both parties to try and work out a resolution.

Bottom line

The ideal strategy is to make full and timely mortgage payments in order to avoid late fees or potentially, foreclosure. If you find that late or missed payments are likely, call your loan servicer as soon as possible to explain your situation.

Learn more: