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

  • First-time homebuyer's guide to open houses

    Open houses are a great way for first-time homebuyers to get out into the market and see what homes are available and to meet Realtors.
  • Mortgage Rates Radar 06/28/2016: Mortgage rates to see "Brexit" decline

    HSH.com releases its latest Weekly Mortgage Rates Radar showing a slight uptick in mortgage rates during the seven-day period ending June 28, as the repercussions of Britain's vote to leave the European Union has begun to drive down interest rates across the globe. The Weekly Mortgage Rates Radar reports the average rates and points offered by lenders for the two most popular types of mortgages, the conforming 30-year fixed-rate mortgage and the conforming 5/1 adjustable-rate mortgage (ARM).
  • MID-YEAR UPDATE: HSH.com’s yearly outlook: 10 items for 2016

    At the start of each year, HSH.com details the important factors we think are most likely to influence the mortgage and real estate markets in the coming year.
  • Buying a home? 15 ways to shop for the lowest mortgage rates

  • Mortgage Rates Radar 06/21/2016: Mortgage rates creep lower

    HSH.com releases its latest Weekly Mortgage Rates Radar showing another decline in popular mortgage rates in the seven-day period ending June 21, as concerns about this week's so-called "Brexit" vote is keeping investors on their toes. The Weekly Mortgage Rates Radar reports the average rates and points offered by lenders for the two most popular types of mortgages, the conforming 30-year fixed-rate mortgage and the conforming 5/1 adjustable-rate mortgage (ARM).