Morgage Grace Period - What is it? How long is it? A Standard Definition...
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There is another 'Grace Period' that many people are not aware of: When a morgage is transferred from one lender to another the borrower is legally entitled to a 60 Day Grace Period beginning the day the loan is transferred. The law was created to protect borrowers because there are often many difficulties that arise when a morgage is transferred from one lender to another. It is also important to note that this 60 Day Grace Period also means that a lender cannot report any late payments to the credit bureaus during this period and may only report such a late payment if you remain behind on your payments after the 60 Day Grace Period has expired.
Other Important Morgage Terms
Government National Morgage Association (GNMA, or Ginnie Mae) - A federal agency that guarantees mortgage securities that are issued against pools of FHA and VA mortgage loans.
Graduated Payment Morgage (GPM) - Morgage in which initial low payments (with potential negative amortization) increase regularly for several years and then level off.
Gross Income - Total income before taxes or expenses are deducted.
Homeowners Warranty - A type of insurance that covers repairs to specified parts of a house for a specific period of time.
Housing and Urban Development (HUD) - A U.S. government agency established to implement federal housing and community development programs; oversees the Federal Housing Administration.
Housing Expense-to-Income Ratio - The ratio, expressed as a percentage, that results when a borrower's housing expenses are divided by his/her gross monthly income.
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Morgage Grace Period Defined...
The Grace Period is the period of time following the due date of your morgage wherein you are not assessed a penalty for the late payment of your morgage. Most lenders provide a 15 day period after your payment is due before they assess any fees for the late payment. For example, if your payment is due on the 1st of January and you don't make a payment until January 14th then that 'late payment' would fall within a 15 day Morgage Grace Period and so a late payment fee would not be assessed.There is another 'Grace Period' that many people are not aware of: When a morgage is transferred from one lender to another the borrower is legally entitled to a 60 Day Grace Period beginning the day the loan is transferred. The law was created to protect borrowers because there are often many difficulties that arise when a morgage is transferred from one lender to another. It is also important to note that this 60 Day Grace Period also means that a lender cannot report any late payments to the credit bureaus during this period and may only report such a late payment if you remain behind on your payments after the 60 Day Grace Period has expired.
Other Important Morgage Terms
Government National Morgage Association (GNMA, or Ginnie Mae) - A federal agency that guarantees mortgage securities that are issued against pools of FHA and VA mortgage loans.
Graduated Payment Morgage (GPM) - Morgage in which initial low payments (with potential negative amortization) increase regularly for several years and then level off.
Gross Income - Total income before taxes or expenses are deducted.
Homeowners Warranty - A type of insurance that covers repairs to specified parts of a house for a specific period of time.
Housing and Urban Development (HUD) - A U.S. government agency established to implement federal housing and community development programs; oversees the Federal Housing Administration.
Housing Expense-to-Income Ratio - The ratio, expressed as a percentage, that results when a borrower's housing expenses are divided by his/her gross monthly income.