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

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

  • 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?
  • The salary you must earn to buy a home in 27 metros

    Here’s how much salary you would need to earn in order to afford the median-priced home in your metro area.
  • Can I separate tax and insurance payments from my mortgage payment?

    It may or may not be possible for you to take on the responsibility
  • HSH.com on the latest move by the Federal Reserve

    The Federal Reserve concluded a meeting today with no change to the federal funds rate and no changes to other monetary policy tools.
  • Advantages of a FHA mortgage in 2017

    FHA loans became more affordable in 2016, thanks to a drop in the annual mortgage insurance premium that the Federal Housing Administration charges. More cost reductions may be on the way in 2017, too.