If a mortgage payment is due on the 30th of each month, is there any
advantage to paying it on the 1st of each month?

(Pay earlier than the due date each month)

Bill wrote:
If a mortgage payment is due on the 30th of each month, is there any
advantage to paying it on the 1st of each month?

(Pay earlier than the due date each month)

That all depends on how your mortgage is written!

Jeff

"Bill" wrote in message
...
If a mortgage payment is due on the 30th of each month, is there any
advantage to paying it on the 1st of each month?

(Pay earlier than the due date each month)


Yes, depending on how your loan is set up, you'll be saving some interest
money by paying early. Very likely that you'll save a whole payment or two
by the end of the term. Maybe a lot more - depends on how the loan is set
up.

Bill wrote:

If a mortgage payment is due on the 30th of each month, is there any advantage to paying it on the 1st of each month?

(Pay earlier than the due date each month)

Depends on how the interest is calculated, there is with some loans.

In article , jeff
wrote:

Bill wrote:
If a mortgage payment is due on the 30th of each month, is there any
advantage to paying it on the 1st of each month?

(Pay earlier than the due date each month)

That all depends on how your mortgage is written!

Jeff



who would be the best bet to analyze your mortgage with frugality in
mind, An accountant?
--
Hint; Enjoy the moment !

VFW wrote:
In article , jeff
wrote:

Bill wrote:
If a mortgage payment is due on the 30th of each month, is there any
advantage to paying it on the 1st of each month?

(Pay earlier than the due date each month)

That all depends on how your mortgage is written!

Jeff



who would be the best bet to analyze your mortgage with frugality in mind, An accountant?

Pity about the fee he will charge to do that. Much more frugal to ask here instead.

VFW wrote:
In article , jeff
wrote:

Bill wrote:
If a mortgage payment is due on the 30th of each month, is there any
advantage to paying it on the 1st of each month?

(Pay earlier than the due date each month)
That all depends on how your mortgage is written!

Jeff


who would be the best bet to analyze your mortgage with frugality in
mind, An accountant?

You can try just reading it. What you really want is to make an extra
payment, ie two on the 30th at least once. That extra should come purely
off the principal, early in a loan it is almost all interest, so you are
ahead there. After that, I wouldn't bother. The math to figure out exact
interest depending on actual payment date is messy and I doubt anyone
applies it.

Paying more, so you pay off early can be substantial. Just what you
can do and get credit for should be written in. Google yielded this:

http://www.mortgageqna.com/mortgage-...gage-loan.html

I'm inclined to think that your real estate agent should have told you
what was allowable. It's been a while since I've had a mortgage, so I
don't know what is standard now. Back then you could pay more and it
would come off your principal. Now, there are gotchas.

I misread this a bit when I first looked at it, so I wanted to clear
up any misunderstanding. I doubt paying on the first, if your loan is
due on the 30th, will be of any benefit.

Jeff

"h" wrote:

Yes, depending on how your loan is set up, you'll be saving some interest
money by paying early. Very likely that you'll save a whole payment or two
by the end of the term. Maybe a lot more - depends on how the loan is set
up.

Not exactly. In the US, most ontime mortgage payments are applied as of the
payment date (usually the first of the month), regardless of when the payment is
actually received. In other words paying two weeks ahead of the due date or two
weeks behind (assuming you are still in the grace period) will have zero effect
on the interest charge.

On most US conforming mortgages, you can make a significant change (reduction)
to the lifetime interest charge on your mortgage by making "extra" principle
payments. Those payments can usually be made as an extra amount on your regular
payment, or as a separate payment. It's important to make sure those payments
are credited as principle reduction payments and not just stuffed in your escrow
account.

However, keep in mind that with extra principle payments, the savings comes at
the end of the mortgage in the form of an earlier payoff date - it will not
reduce the amount of your monthly payment. It will also be reflected in the form
of a smaller mortgage interest deduction each year. This may or may not be a
good thing, depending on whether you are subject to AMT.

Given the historically low mortgage rates these days, paying off your mortgage
early should take back seat to paying off car loans, credit cards and building
up your personal cash cusion.

Mon, 8 Feb 2010 09:04:11 -0800 from Bill
:

If a mortgage payment is due on the 30th of each month, is there any
advantage to paying it on the 1st of each month?

(Pay earlier than the due date each month)

It depends on the mortgage. The mortgage on my first house computed
interest based on the actual dates payments were received, so there
was an advantage to paying early. The mortgage on my present house
computes interest on the date the payment is due, regardless of when
it is received,(*) so there is no advantage to paying early.


(*) There's a late fee for paying late, and presumably interest
starts accruing again if the payment is very late, but I don't know
the details.

--
Stan Brown, Oak Road Systems, Tompkins County, New York, USA
http://OakRoadSystems.com
Shikata ga nai...

Mon, 08 Feb 2010 19:20:32 -0700 from Robert Neville
:
[mostly good advice]

But the word is principal, not principle!



--
Stan Brown, Oak Road Systems, Tompkins County, New York, USA
http://OakRoadSystems.com
Shikata ga nai...

Stan Brown wrote:

But the word is principal, not principle!

Too late at night and fighting flu for past 3 days. You are correct! Cusion
should have been cushion as well.

Robert Neville wrote:

Given the historically low mortgage rates these days, paying off your mortgage
early should take back seat to paying off car loans, credit cards and building
up your personal cash cusion.

This is true, but the savings interest rates are even lower than the
mortgage rates. For a cash cushion you can get a HELOC, while paying
your mortgage off as quickly as possible.

Amazing to recall that simple savings accounts used to pay 5.25%
interest _and_ mortgage rates were 4.5-5%. Nowadays you see banks
boasting about 2% interest on CDs.

Bill wrote:
If a mortgage payment is due on the 30th of each month, is there any
advantage to paying it on the 1st of each month?

(Pay earlier than the due date each month)

No. It will not save you any money.

On Feb 9, 6:41*am, jeff wrote:
VFW wrote:
In article , jeff
wrote:

Bill wrote:
If a mortgage payment is due on the 30th of each month, is there any
advantage to paying it on the 1st of each month?

(Pay earlier than the due date each month)
* That all depends on how your mortgage is written!

* *Jeff

who would be the best bet to analyze your mortgage with frugality in
mind, An accountant?

* *You can try just reading it. What you really want is to make an extra
payment, ie two on the 30th at least once. That extra should come purely
off the principal, early in a loan it is almost all interest, so you are
ahead there. After that, I wouldn't bother. The math to figure out exact
interest depending on actual payment date is messy and I doubt anyone
applies it.

* *Paying more, so you pay off early can be substantial. Just what you
can do and get credit for should be written in. Google yielded this:

http://www.mortgageqna.com/mortgage-...ff-penalty-for...

I'm inclined to think that your real estate agent should have told you
what was allowable. It's been a while since I've had a mortgage, so I
don't know what is standard now. Back then you could pay more and it
would come off your principal. Now, there are gotchas.

* *I misread this a bit when I first looked at it, so I wanted to clear
up any misunderstanding. I doubt paying on the first, if your loan is
due on the 30th, will be of any benefit.

* *Jeff- Hide quoted text -

- Show quoted text -

Real estate agents are not the person to ask about mortgage terms.
They have nothing to do with the mortgage.