GeoffM

Wondered about turning auto-payment on to avoid missing payments, then realised they might try take the money before it was there for the taking. Today's payday (every other Friday) and today is also mortgage day (1st of the month). A little too close for my liking this month!

It'll sort of happen again in October as the 1st falls on a Sunday so we have to pay by Friday I think.

PS I do normally try to pay a little early, just things a little tight this month.

Pulaski

Mortgage payments and other automated charges that fall on a weekend always fall on the next business day (Monday, or Tuesday if Monday is a bank holiday). If 7/4 or 12/25 is a Friday, then payments are also moved to the following Monday.

Incidentally you have 15 days to make your mortgage payment without any penalty, charge or impact to your credit history. We rarely pay out mortgage before the thirteenth of the month, and have scheduled a payment that didn't clear until the 16th at least once in the past year.

NatashaB

Interesting... I won't panic so much about paying ours on the dot any more then! we are on a bi-weekly pay schedule too and sometimes it falls a day or so after the mortgage due date.

petitefrancaise

rookie question...
if you did want to postpone the payment by a couple of days, what would you have to do?

Pulaski

Do you have automatic payments set up? ..... If so, I don't think you can "postpone" it. We used to be on a Chase fixed payment plan, and come hell or high water our account was debited on the first day of each month.

All I can suggest is talk to your mortgage bank.

sir_eccles

I pay mine manually and often seem to pay it a week before it is due. I'm sure there is a way to work out if the seven days of interest saved amounts to much.

I think the answer is zero. From what I have read unless it explicitly says that interest is calculated daily then as you have a 15 day grace period for late payments, in essence the bank gets a grace period if you pay early.

Bob

I've seen a couple that pull it the Friday before the holiday if it falls on the weekend or on a Monday holiday.

Pulaski

Yup - the payments are fixed for the life of the mortgage, subject to any late fees, so you're saving nothing on the mortgage by paying early. ..... and as you have correctly concluded, you suffer no interest penalty by paying upto 15 days late either. In other words, all mortgage payments are deemed to be made on the first of the month, unless they are more than 15 days late.

Pulaski

If that's so then the creditor must be manually overriding the payment date, because otherwise automated debits will get fed into the "hopper" at the Fed on the due date and not be processed until the next business day.

sir_eccles

Yup, the only benefit I see is that my pay comes in and I schedule the payment straight away so it doesn't get forgotten or spent on something else.

The only thing that does help is putting more towards the principle. Before Young Sir turned up we threw quite a bit extra in each payment assigned to the principle. We made quite a dent (I can't remember but want to say we knocked off at least 10k extra off) before realizing that babies are expensive and we would have to scale back to the standard payment.

GeoffM

Well that 15-day thing is obviously news to me! Everything just says "due 1st of the month".

What I tend to do is if the due date is a week or less away then I just pay it straight away after (wife's) payday, and if it's more than that then it gets put into the savings account so we don't spend it.

Paying extra is prominently offered though, but paying twice a month is not offered by this particular mortgage company.

sir_eccles

It isn't necessarily universal but it is usually there in the small print or on the website somewhere.

Yes, I was just checking the FAQ of mine and it says the same about twice monthly payments. Which is a shame as it is often touted as an easy way of paying extra.

scrubbedexpat091

Depends on how the rules and laws are and how banks operate.

My bank in Canada takes debits first then deposits, so if a payment and deposit are auto and due same day, they will take the debit first, then make the deposit.

Luckily the bank's system knows the money is technically there, so doesn't charge NSF or refuse the payment.

Makes for a weird line on the statement, but in the end works out.

We have all our payments come out between the 29 and 1st as my wife is paid on set days each month, so easier to use her pay for bills and mine for rent. Making all the bills around the same time, is just for ease of dealing with them and not having random things in the month all over. The only mid month bill is car insurance, that can't be changed.

Pulaski

Are you saying that's how they appear on the statement, because if so, it's nothing more than ppresentation, and isn't reflective of how the transactions are actually processed, and the fact that an NSF charge isn't levied if there are credits to cover it is indicative of that.

scrubbedexpat091

How they do it behind the scenes no clue, that's how the bank answers the question and presents it on the statement.