Bouncing a check is a common occurrence. Bouncing a mortgage check can cost you a lot of money, and affect your credit for a long time. If you made an error balancing your checkbook, consider it as a lesson learned. If you do it on a consistent basis, you need to look at ways to change your spending habits, or reduce your overall debt.
Lender
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If your bank returns your mortgage check to your lender because of insufficient funds, your lender can return the check to you or attempt to redeposit it. In 2011, most mortgage lenders use electronic deposits, so if you do not have funds to cover the check amount, it will bounce the day your lender receives it in the mail. You will be charged a late fee if you do not replace the check with a valid one, prior to the end of your grace period.
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Bank
Your bank charges a fee each time it does not honor a check because of insufficient funds. If your lender attempts to cash the check a second time and you have not deposited enough to cover the check, you will incur another charge. If you develop a consistent pattern of bouncing checks, your bank has the option of closing your account, although it rarely does that, since it makes a lot of money from fee income.
Credit
Your lender will report your late payment to the credit bureaus, if your bank does not pay your check by the time your payment is 30 days late. A recent 30-day late payment on your mortgage will have a major impact on your credit score. Mortgage late payments lowers your score more than almost any other delinquency, with the exception of a bankruptcy, foreclosure or judgment. Your score will drop immediately, but it takes several months of on-time payments to restore your previous score.
Considerations
There is no advantage to writing a check for your mortgage, if you do not have funds to cover it. You will receive late charges from your bank in addition to late fees from your lender. If you do not have sufficient funds to pay your mortgage, contact your lender and let it know when you will be sending in your payment. If you believe that you fall further behind because of previously unforeseen expenses, talk to your lender about a loan modification to lower your payment.