"What are late fees? And how do they affect me?"

Late fees, and late mortgage payments in general, can be far more expensive than your truth in lending statement may suggest. The impact on your credit of just one late mortgage payment can be worse than several late payments on smaller tradelines, such as credit cards or auto loan payments. So even though the late fee can be expensive by itself, the increased cost of all of your credit caused by the reduction in your credit score can be significantly more. This is why it is advisable to always make timely payments to your mortgage, as your first priority.

Late fees are when you are late on your mortgage by 15 days. Late fees can vary from lender to lender and in some instances state to state. The average late fee is 5% of the payment.

You pay a late fee if your payment is more than 15 days late.
Your credit only reflects a late payment once the payment has gone 30 days past due or more.

If you have your mortgage loan payments set up for automatic withdrawal from your bank account you can usually set your withdrawal to come out on any day before your grace period is up. Therefore, if you have a 15 day grace period on your mortgage before a late fee is assessed, you could even set up your payment to come out on the last day of this grace period if you needed to in order to avoid the late fee. Therefore, if you have your payment set up to come out on the first day of the month and that day is not good for you, consider moving your withdrawal date back (as long as it is still within your grace period) in order to help out and make matter for manageable for yourself.

With the automatic mortgage payment withdrawal service, you can choose the date your account is debited, up to the 15th of the month. This is a great way to avoid late payments for those who travel.

If you are going to be late try calling the lender and letting them know your situation. Some lenders will waive the late fee once every 12 months for customers who are normally in good standing.