I have just entered into a new mortgage. Like many mortgage payment requirements, my payment is due on the 1st, with a penalty if not paid by the 15th. I am just curious if it is safe to play the grace period game as long as one absolutely makes sure the payment is in before the 15th. I know there is no late fee and no reporting to the CB's, however are there any disadvantage to doing this? Can it hurt any "internal" scoring or impact any refinancing efforts in the future?
Thanks for any thoughts!
Never heard this w/regards to mortgage. I would suspect playing it out to the final day/days gives likelihood you might truly be late and get penalized. What difference does 15 days really make? Hopefully not alot of possibly other issues might exist. As if mortgage payment is say 2k then you are talking 5-10 in interest earned for a bigger risk. Just my honest opinion. Not saying this is you, just would pay by due date for minimum gains
It depends on the terms of the loan.
Most mortgage loans have a monthly calculated interest charge
and it is the same no mater when you pay.
With this type of loan, yes you save by holding onto your money longer,
if in a good HYS, etc.
However some use a simple interest mortgage formula. (daily interest)
This is how most car, & personal loans are calculated.
With this type you benefit by paying as early as you can.
In almost all cases the daily loss on a mortgage loan's interest in more than
what would be earned by keeping the payment for the float.
You need to know what type of mortgage loan you are in.
I have never witnessed it have any impact on credit. People.even make their payment on the last day of the month - zero impact to credit - just need to pay the late fee. You're perfectly fine
Grace period on a mortgage is just for the fee AFAIK. I had a third party paying my rental mortgage, and their payment times varied from the 3rd to the 7th and never any issues.
Ultimately you can play with it, not much risk but paying a late fee is never smart financially unless you have to. Actual credit impact is 31 days after the original due date (which I think is the 1st, not the 15th assuming typical grace periods).
I personally don't see much value in two weeks of interest, but if it helps your cash flow by all means leverage it.
Our mortgage is with SunTrust/Truist and I think there's a late fee after the 8th.