WORD: Late Charge

And the WORDS for Today:

Late Charge—is a penalty (fee) charged to a borrower who failed to make an installment payment on time. For mortgage payments, late charges usually are incurred if the creditor has not received the scheduled payment by the 15th of the month. Prior to that date the borrower is in what is commonly called a “grace period.” Late charges are usually allowed to be included on your tax return as interest for tax deduction purposes. The amount of the late fee will typically be stipulated in the contract itself or set by state statue. In all cases it must be considered “reasonable” and not violate state usury laws.

Late Charge Assessment—a fee charged to a borrower’s account when a payment is not received by the due date. This fee is typically charged when a payment is not received by the 15th of the month.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)