Mortgage Payment

Mortgage Payment For New Homeowners And Understanding Statement

Gustan Cho Associates are mortgage brokers licensed in 48 states

This BLOG On Mortgage Payment For New Homeowners And Understanding Statement Was UPDATED On May 13th, 2019

Once home buyers have closed on their purchase home loan or refinance loan, they will start getting monthly mortgage statements. Borrowers will be needing to pay monthly housing payment.

  • Days of providing documents to mortgage lenders are over
  • No more documents need to be provided such as the following:
    • updated bank statements
    • updated paycheck stubs
    • letters of explanations are now finally over
  • Homeowners can now do whatever they please with their finances
  • Nobody will question homeowners about irregular or large deposits, minor overdrafts, credit inquiries, or unreimbursed expenses
  • The only thing to worry about is making new housing payment in time and have the lender off your back
  • However, there are basics homeowners need to know about mortgage housing payment
  • Make sure not to make minor mistakes that can cause a lot of red tape and grief later
  • Possibly a late payment on a credit report because housing payment has not been applied correctly

Common Mistakes With Monthly Payments

Many homeowners send in extra monthly on top of their minimum monthly payment without any explanation to lender.

  • The extra funds sent in every month can be applied in several different ways
  • Without any direction, the lender will not know what to do with it
  • For example, extra payments can be applied to pre-pay for a future mortgage payment
  • This because the homeowner goes on a business trip or extended vacation
  • The surplus monthly payment may be meant to pay down the principal balance of loan under the lender’s eye
  • The extra monthly mortgage payment can be made to replenish the escrow account
  • Or to have a surplus cushion on the escrow account
  • Without borrowers direction on where the extra payment needs to go to, the lender will most likely just impound the surplus on a separate account until further notice by a borrower
  • I would strongly recommend contacting the lender to explain of paying the extra payment on top of minimum required mortgage payment
  • Make sure to take notes, take down the name of the representative, the date, the time, and the case number if applicable
  • Also, write loan number on every check submitted to the mortgage company
  • Many times, a family member may send in a check to the mortgage company
  • Or may use a different check such as a company check versus personal check with name on it
  • Without an account number written on the memo section of the check, it can create a major nightmare trying to prove that you have sent in the payment

Paying Payments In Advance

When planning on going on an extended vacation or business trip and are sending in several months of payments all in advance, contact mortgage servicing company. Explain the situation and intention and where to apply for payment.

  • If borrowers were to send in three months worth of payments in advance and the lender does not know you are pre-paying housing payment, the lender can apply the excess payment towards paying down the principal
  • When the following month payment comes due and they do not see a minimum payment, they will report the payment late on the credit reporting agencies
  • Homeowners do not want a 30 day or 60-day late payment on payment history
  • If paying slightly more on a monthly payment to reduce the principal balance, then notify the mortgage company
  • Tell them that is what you are doing so there is no misunderstanding and the extra funds get allocated to the right place

Auto Pay Monthly Payment

Mortgage housing payments are due on the first of the month and homeowners have a 15 day grace period to make payment before the mortgage company will assess a late payment fee for the month.

  • As long as borrowers are not 30 days late on a payment, it will reflect that they are timely on payment
  • Do not want to be 30 days on payment
  • Not only will a 30-day late payment on payment devastate credit scores, but that late payment history will stay on credit report for 7 years
  • Cannot get a new mortgage or refinance a mortgage with late payment over 30 days in the past 12 months
  • May want to have an automatic payment system set up with the bank
  • This way mortgage company takes the monthly payment out of checking or savings account on the 15th of every month to avoid any chances of being late on the mortgage payment

Related> Can I qualify for a mortgage with recent late payments?

Related> Recent late payments

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