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Mortgage Payment Help

December 2nd, 2018 at 02:25 am

I have the funds to pay the first mortgage and I’m anxious to do that. My only concern is that 9x out of 10 the mortgage is going to be sold. Should I wait until the 15th of December (due January 1st) to pay it or just send it off now? I believe in paying the bills as soon as they come in and when you have the money. I can actually pay both January and February with a extra principal payment as well.

My mortgage processor informed not to setup auto payments because it would be sold. My sister used the same company and they sold her mortgage to Wells Fargo

7 Responses to “Mortgage Payment Help”

  1. AnotherReader Says:

    The mortgage was originated by the company from where you got it. Almost all loans are sold to Fannie Mae or Freddie Mac now. The servicing of your loan is then sold by the new mortgage owner to a bank or other servicer.

    There is no reason to pay the mortgage until it's much closer to being due. The interest is not reduced if you pay early. There is also a good chance it will be sold before the first payment is due. Sometimes this leads to payments getting lost in the transition and it can take time to straighten that out. There is a grace period when a loan is sold and the servicer changes.

    In your shoes, I would wait until a week before the due date before paying the bill. If you have not received new instructions, then pay the bill. I like to pay electronically when possible because the audit trail is easier to follow.

    In the future, set up automatic payments. You can push the payment from your bank or you can have the servicer pull the payment. I like to let the servicer pull the payment, because it's easier for them to see their records if anything goes wrong.

  2. Amber Says:

    Thanks Another Reader, I’ll send a week before it’s due. I’m excited, nervous and anxious all at the same time.

  3. Carol Says:

    Our bill comes with a line for extra principle payment, which I usually do since it will shorten the length of the mortgage (in the very long run, it does save money.) I do automate that payment, just mentioning that the line is on the bill.

  4. DW Says:

    If you’re still following the Dave Ramsey method, I think you should take that mortgage intensity and apply it to the student loans. Based on your previous post about them, it sounds like they have some ugly terms.

  5. AnotherReader Says:

    Amber has four alligators nipping at her heels - two credit cards and two student loans. In her shoes, I would look at the interest rates on each loan and how long to pay them off in various scenarios.

    With good credit, it might be possible to transfer the credit card balances to zero percent interest cards. The cards could be paid off much faster under that scenario. She has been getting further behind on her student loans because the minimum payment does not pay off ell of the interest, so she has been accruing interest on interest. If she pays the full principal and interest on the student loans, they will stop growing and the balance will decrease.

    With the second job, she should really make a dent in the debt. Strategizing which debt to pay first should help her progress.

  6. Carol Says:

    Yes, work on the debt before sending extra to mortgage. Good luck!

  7. LuckyRobin Says:

    This is why I finance with a credit union. Mine never sells the loans. And they apply it the day they receive it, not the due date. Maybe when your credit cards are gone, you may consider refinancing with a credit union. Otherwise your mortgage may be sold multiple times over the years. I would hold off on paying extra on the mortgage until your other debt is taken care of.

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