dcsimg
We research, you save.
Got Questions On Rates? (855) 610-2972

Where are mortgage rates headed? Find out with our new Two-Month Forecast.

Does it benefit me to make my mortgage payment 25 days early each month?

By   |  Posted in Ask The Expert

Q: Does it benefit me to make my mortgage payment 25 days early each month?

A: Unless the mortgage lender is actually posting the payment when you send it, the answer is no. Your payment is required to be in the lender's hands by a given due date, and any payment you send before that date will be applied by/on that due date. Think of it this way: A payment is due by the 6th of the month. Your payment is applied; five days later, the next payment you send arrives. It's not due until the 6th of the next month, and the lender will process this as though it came in right on schedule.

Standard loan amortization means your loan is set up on a monthly compounded arrangement, with a payment due in each of 360 monthly periods (30 year term). As long as a payment arrives during each 30-day window, it will be processed as that month's due payment. If mortgages were compounded using a different method--daily compounding, simple interest, etc.--it might have some effect, but that's not the case here.

More help from HSH.com

  • HSH.com on the latest move by the Federal Reserve

    The Federal Reserve concluded a meeting today with a no change to the federal funds rate, but announced the start of Quantitative Tightening (or at least Quantitative Tapering) of its massive balance sheet.
  • 10 best states for home buyers

    HSH.com recently created a database of the home-buying-assistance programs in every state. From that database, we have assembled a list of the states which offer the most robust set of programs to its residents.
  • Home price recovery index: Which metros have improved the most, least?

    Have home prices in your area fully recovered from the declines suffered during the Great Recession, or are they still struggling to make it back to the peak it reached before the crisis?
  • 10 metros where a home costs about $1,000/month

    HSH.com identifies 10 metro areas where you can afford the principal, interest, taxes and insurance payments on a median-priced home for only around $1,000 per month.
  • The salary you must earn to buy a home in 50 metros

    Here’s how much salary you would need to earn in order to afford the median-priced home in your metro area.