Rules vary and it’s best to get all the answers straight from the horse’s mouth. In summary, speak with your loan servicer once you take out your mortgage to ensure your payments are processed properly. Less common ways are in-branch, wire transfer, phone pay, and other means, which probably includes paying the mortgage with a credit card. The top three are auto-pay, via the servicer website, and by mail.
In terms of paying, we see from the graphic above (from the Mortgage Bankers Association) that lists the most common ways to pay a mortgage. So pay close attention to who this is, and note that mortgage loans are often transferred from one servicer to another, especially shortly after closing. The “loan servicer” is the company that actually collects your mortgage payment each month, and may not be the individual or company that originated your loan.
Lastly, let’s talk about how to make a mortgage payment to your loan servicer.įirst things first, note that I said loan servicer, not lender or broker or any other entity. Looking to refinance or get pre-approved? Quickly get matched with a top mortgage lender today! How to Make Mortgage Payments This differs from credit cards and other types of loans, such as HELOCs, where the interest is calculated daily. The interest is already figured out for the month using the previous month’s balance, so it doesn’t matter if you pay a few days early. Your loan servicer may accept payment on that date, but it won’t mean you’ll pay less interest. You might be thinking, “Hey, I can save money on interest if I make my payments on the 20th or 25th of each month, instead of the first of the next month.” Okay, so we know paying late isn’t too smart, but what about paying the mortgage before the due date? So it shouldn’t matter if you pay on the 1st or the 15th, as long as the payment is made on time.Meaning you won’t save money or lose money on interest.Because they’re calculated monthly using simple interest.In most cases there’s no benefit to paying the mortgage before the due date.What If I Pay My Mortgage Before the Due Date?
Or if you want to buy more real estate in the near future.Īfter all, lenders aren’t too fond of homeowners who don’t make their mortgage payments on time. The result could be a substantial credit score ding, and greater difficulty obtaining subsequent mortgages in the future, a major issue if you need/want to refinance your home loan for some reason. So if your monthly mortgage payment is $3,000 a month, that’s $150 smackers.Īnd if you wait too long to make a payment, typically 30+ days beyond the due date, it could eventually be reported to the credit bureaus as a late payment, which will really hurt. We’re talking a percentage of the mortgage payment, such as 5%. We’re not talking a $20 late fee and a slap on the wrist. These fees can vary, but are often pretty steep. If you play this “pay at the last minute game” each month, you could eventually get burned and wind up paying a mortgage late fee.
Of up to 15 days to pay without penalty.But mortgage lenders generally provide a grace period.Mortgages are typically due on the first of the month.