mobel home

[Harry]

I have a problem.I bought a home.With a fixed morgage.In it it states that The payment is do on the 15 of the month .But I have a 15 day past that to pay without any penilty.My question is Can they Go over my head and demand payment no latter than the 15 of the month without me signing anything.Help me Please.

[rmurray]

If your contract says your payment is due on the 15th...It is due on the 15th and considered late on the 16th..The lender has every right to ask for payment on time..

Lenders have every right to ask you to pay on time..The delay in late charges has nothing to do with the due date..The idea is to give you a break if the mail runs a little slow...

Even though there is no late charge...always paying you loan 15 days late will ADD interest to the loan from the contract...On a 30 year note..consistant 15 day late payment will add about 6 extra payments to the overall note..This is not a penalty...just the extra interest the bank deserves for the money you paid late..By the way..it works the other way...if you are consistently early..you will save a similar amount in overall interest..

A suggestion....When you get your tax refund...likely to be a little larger this year because of the tax reduction bill Congress passed and the President signed...Take that extra money and pay 1 extra payment...continue your regular payment habits...and..you will always be 15 days early...

[JohnnyJ]

RM is kind of right: "By the way..it works the other way...if you are consistently early..you will save a similar amount in overall interest.."

The only way this will work is if you pay ahead to the point you might pay off the
loan before the final due date. Otherwise you will not receive anything for paying
early, other than a good credit history.

If you want to, you can always pay an additional amount of pricipal on the note
each month. Let's say you pay $100 a month additional. This amount will
subtract from the principal owed at the end of the loan, and decrease the
time it takes to pay off the note. If you do this over a 15 year period, you can
save a lot of interest charges, and pay off your home sooner. Ask your closing
attorney to explain this to you in greater detail. You could save thousands.

good luck

[rmurray]

Actually most mortgages are simple interest..calulated on a daily basis...This means that the interest is calculated everyday....if you pay a payment early..the next day's interest (and everyday until the payment date) is slightly lower than the original contract had anticipated...Even though the savings in a particular month is very low...compounded over a long period of time can be significant..

Compounding can also make VERY large savings for prepayment of principle...On a 30 year note..a customer always (the trick here is ALWAYS) paying 1 payment exactly on the due date...AND..1 extra payment a year will save nearly 8 years of payments (this amount is all interest saved)...Every dollar of extra money paid lowers the overall interest of the loan...Extra amounts in the early days of a loan..compound the savings over a long period of time and save large amounts of money..$100 extra in the first month will save over $300 in the life of the loan..