Does your mortgage check drift into the lender's office somewhere between the beginning and mid-point of each month?
Then you can stop feeling guilty.
Nearly all mortgage payments are due on the first. Yet people who pay a few days later--during the "grace period"--are rarely penalized.
"There are so many things to worry about in today's society. But making mortgage payments during the grace period isn't one of them," says Sam Lyons, senior vice president at Great Western Bank, a nationwide lender based in Beverly Hills.
Don't worry about being stuck with a late charge when you pay during the grace period. Nearly everywhere in the nation such a penalty would be illegal.
Don't worry, either, that your credit standing will be jeopardized by grace period payments.
Technically you're probably delinquent if you pay after the first of the month. But in reality, it's a rare lender who will classify you a "late payer" unless your check arrives a full 30 to 60 days late, Lyons points out.
"Custom and usage is such that we don't hold people to the standard that they pay on the first of the month," says Lyons, who confides that his own house payments often don't reach the mailbox until the second or third day of the month.
Most lenders take the same approach as Great Western Bank.
"We love those people who get us their checks by the first of the month. But so long as you pay in 15 days, you're still considered an on-time payer," says Kenneth Ladny of Countrywide Funding, based in Pasadena, which handles 200,000 mortgage accounts.
Still, Ladny and other mortgage specialists say there are solid reasons not to play games with your mortgage payments. They offer these pointers:
--Avoid going too far into your grace period if your payments travel through the mail.
"Some people play post office roulette and that's a mistake," says Ladny, emphasizing the unpredictability of the U.S. Postal Service.
"Sometimes checks go to some pigeonhole in post office heaven," he says.
You may calculate that it should take just two or three days for your payment to travel from your mailbox to your lender's office half way across the continent. But there's always the rare chance an errant envelope could take longer. And the likelihood of a late charge for a check received after mid-month is great.
--Don't assume that claiming a timely postmark will matter in defending yourself in averting a late charge.
Mortgage servicing departments are usually big operations that shred envelopes daily. No record of the postmark on your envelope would survive the shredding. Anyway, the lender doesn't care when you sent your check--only when it was received.
"We're in the business of collecting payments. We're not in the business of delivering mail. We're not responsible for what the post office does," Ladny emphasizes.
--Consider using express mail or another overnight service such as Federal Express if you must send your payment close to the mid-month mark.
Overnight parcel services are expensive. Expect to pay $9 to $15 for such a service. Even so, that could be a $20 or greater savings over a late charge.
Be cautious about using an overnight company, however. Most such companies will not deliver to a post office box. You must provide the mortgage servicing department's street address.
--Don't bother predating your mortgage checks.
If you're late, you're late. No one will be impressed that your check bears a date prior to the grace period deadline.
Mortgage processing people don't care when you claim you wrote the check. They're only interested in when they hold a cashable check in their hands.
--Don't kid yourself you're beating the system by sending a postdated check.
Some believe that a mortgage payment will be credited on the day it arrives, even if the check bears a later date. They postdate a mortgage payment to give themselves more time to get funds to the bank to cover the check.
But the mortgage servicing department can't deposit a postdated check and won't credit your payment until the check is cashable.
"Until then I have a worthless piece of paper in my hand," says Ladny, noting that postdated checks aggravate many lenders.
--Consider having your payments drafted automatically from your checking account if tardy payments have been a problem for you.
You may have a surplus in your checking account yet still make tardy payments. Perhaps you're a working parent with little time to attend to bills. Or maybe you fall behind because you travel frequently on business. Whatever the reason for your tardiness, automatic bank drafts could be the answer.
--Don't hesitate to fight the imposition of a late-payment fee even if you believe it was legitimately imposed.
Contrary to what some mortgage clerks might tell you, there's no law that requires a lender to impose a late charge at any point. The lender can simply waive the charge if it chooses.