What is a Mortgage “Grace Period”?

[Kyle Curtin]

Quick tip about mortgages!

Did you know that you aren’t “required” to pay your mortgage on the 1st of the month?! Let me re-phrase, banks typically give you what is called a “grace period” when you have residential mortgage debt. A grace period is a period of time between the 1st of the month and when the mortgage is actually considered late! It is not considered late on the 2nd of the month! This grace period is usually between 14-16 days after the 1st of the month (depending on your lender!)

Basically what this means is that while the debt payment is due on the 1st, you actually have potentially another 2 weeks +/- to pay it without penalty. If you try to pay it after that grace period is up, then the mortgage is technically considered late and that’s when the bad things will happen!

This is something that’s very interesting especially if you are expecting rents from a multifamily to satisfy that payment.

Does anyone like to strategize the draft to a certain day within your grace period that is not on the 1st?