Don’t Pay Your Mortgage on This Day of the Month

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When it comes to managing your finances, you most likely look for the best ways to save money and avoid unnecessary expenses. One aspect of financial management that can be tricky is knowing the right time to pay your mortgage each month.

While it may seem like a good idea to pay your mortgage as soon as you get your paycheck, there’s one day of the month when it might not be the best idea to make that payment.

The Worst Day to Pay: The Due Date

Surprisingly, the one day you might want to avoid paying your mortgage is the actual due date. Here’s why:

Late Fees May Apply Immediately

Many mortgage companies have a grace period, which is a set number of days after the due date during which you can pay without penalty. However, if your payment arrives even one day after this grace period, you could be hit with a late fee. If you wait until the due date to pay, you’re risking delays that might push your payment past the grace period.

Processing Delays Can Cost You

Payments don’t always get processed the same day they’re received. If you pay on the due date, weekends or bank holidays could delay the processing, and your payment might not be recorded on time. This can lead to unnecessary late charges and can even affect your credit score if the payment is reported as late.

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The Best Day to Pay: Well Before the Due Date

So, when should you pay your mortgage? Here are some suggestions:

Pay a Few Days Early

Aim to pay your mortgage a few days before the due date. This buffer ensures that even if there are delays in processing, your payment will still be on time. It also gives you peace of mind, knowing that you’ve taken care of this important bill.

Align With Your Paycheck

If you get paid bi-weekly or twice a month, try to align your mortgage payment with your paycheck that comes out well before the due date. This way, you ensure that you have the funds available and that your payment is prioritized.

Automatic Payments

Consider setting up automatic payments. This way, you can schedule the payment to be deducted from your account well before the due date, and you won’t have to worry about remembering to make the payment each month.

Plan Ahead

Paying your mortgage on time is crucial for maintaining good credit and avoiding extra charges. Here’s how to plan ahead:

Know Your Grace Period

Understand your mortgage’s grace period. This is the time frame you have to pay your mortgage without incurring late fees after the due date has passed.

Check Payment Processing Times

Find out how long it takes for your mortgage company to process payments. Some companies process payments immediately, while others may take a few days.

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Stay Informed About Holidays

Keep an eye on the calendar for bank holidays or weekends that could affect when your payment is processed. Plan to pay before these dates.

The Bottom Line

Paying your mortgage is a significant part of your financial responsibility, and it’s important to do it wisely. Avoid paying your mortgage on the due date to sidestep potential late fees and processing delays. Instead, plan to pay a few days early, align payments with your paycheck, or set up automatic payments to ensure you’re always on time. This simple strategy can save you money and stress in the long run.

Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.

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