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#1
Posted to misc.consumers.frugal-living,misc.consumers.house
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Pay mortage payment before due date?
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) |
#2
Posted to misc.consumers.frugal-living,misc.consumers.house
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Pay mortage payment before due date?
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 |
#3
Posted to misc.consumers.frugal-living,misc.consumers.house
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Pay mortage payment before due date?
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 ! |
#4
Posted to misc.consumers.frugal-living,misc.consumers.house
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Pay mortage payment before due date?
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. |
#5
Posted to misc.consumers.frugal-living,misc.consumers.house
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Pay mortage payment before due date?
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 |
#6
Posted to misc.consumers.frugal-living,misc.consumers.house
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Pay mortage payment before due date?
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. |
#7
Posted to misc.consumers.frugal-living,misc.consumers.house
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Pay mortage payment before due date?
"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. |
#8
Posted to misc.consumers.frugal-living,misc.consumers.house
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Pay mortage payment before due date?
"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. |
#9
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Pay mortage payment before due date?
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... |
#10
Posted to misc.consumers.frugal-living,misc.consumers.house
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Pay mortage payment before due date?
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. |
#11
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Pay mortage payment before due date?
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. |
#12
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Pay mortage payment before due date?
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. |
#13
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Pay mortage payment before due date?
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... |
#14
Posted to misc.consumers.frugal-living,misc.consumers.house
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Pay mortage payment before due date?
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. |
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