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Can I skip a mortgage payment?

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  • djohnflatfeecfp
    replied
    Hey, I just like your logo - Go Bucks!

     

    Seriously, I'm glad you questioned the "unsure" answer from your bank and took the time to talk to someone who knew the correct answer.  I'm amazed how many people will guess instead of just saying - "I don't know. Let me find out and get back to you with the right answer."

    Leave a comment:


  • Mminter
    replied
    Best way to go is to get the right answer from your bank.

    Unfortunately, the way their computers operate, you cannot “save up” payments during times of financial plenty and have them apply to some future period of

    financial drought.

    The companies want a payment from you every 30 days or so. So you really aren’t ahead, even though you have made extra payments. They just applied extra

    payments to lowering your loan balance but they expect you to keep paying each month. Miss a payment and they will charge you late fees and notify the

    credit agencies, and they will lower your FICO score.

    I would not take the risk before getting the right answer from your Bank.

    There certainly is an advantage in sending in a lump sum because once you pay them one dollar, you stop paying interest on that dollar forever.

    You will save slightly more than spreading out that payment.

    When you pay sooner you start saving sooner.

     

     

    Leave a comment:


  • q-school
    replied
    also not direct answer to your question, but obviously you can skip a payment.  your question relates to the consequences of skipping.
    I think unstated is whether you should be paying extra towards principal prepayment or establishing your emergency fund as a higher priority.

    good luck!

    in a few years, none of this will matter much except possibly if you hurt your credit score.

    Leave a comment:


  • MPMD
    replied




    Called the bank today and asked to speak to someone higher up. They did confirm that my extra payments have indeed gone toward the principal and not toward future payments, so the first guy was wrong. She also told me that I was far enough ahead that I could skip a principal payment if I wanted to, but that I’d still need to pay the escrow and interest for the month. All in all, it’s not even going to be that much less really, so I think I’ll just pay it.




    Read your note.  Everything should be in the note.

    If your cash is that tight that those items you mention are pushing you to the limit, you should not be making excess monthly payments.  This is what a cash cushion is for.
    Click to expand…


    I have a cash cushion. It was purely a cash flow deal, and nothing that’s going to break me. I’m just going to go ahead and pay my normal payment.
    Click to expand...


    Thank goodness.

    In the future make damned sure this is going to principal!!

    Leave a comment:


  • morrislynch
    replied
    I agree with you.

    Leave a comment:


  • Vottomatic
    replied
    Called the bank today and asked to speak to someone higher up. They did confirm that my extra payments have indeed gone toward the principal and not toward future payments, so the first guy was wrong. She also told me that I was far enough ahead that I could skip a principal payment if I wanted to, but that I'd still need to pay the escrow and interest for the month. All in all, it's not even going to be that much less really, so I think I'll just pay it.




    Read your note.  Everything should be in the note.

    If your cash is that tight that those items you mention are pushing you to the limit, you should not be making excess monthly payments.  This is what a cash cushion is for.
    Click to expand...


    I have a cash cushion. It was purely a cash flow deal, and nothing that's going to break me. I'm just going to go ahead and pay my normal payment.

    Leave a comment:


  • Craigy
    replied
    Read your note.  Everything should be in the note.

    If your cash is that tight that those items you mention are pushing you to the limit, you should not be making excess monthly payments.  This is what a cash cushion is for.

    Leave a comment:


  • Farfetched
    replied
    Agreed. It seems you have paid the payments in advance (scheduled monthly principles plus interest) instead of applying to the principle. Emaning you are not actually saving any interest by paying more earlier. I sent a bank a lump sump recently, confirming it to be applied to the principle only. The following month I get the notification to pay my usual monthly due amount, but my principle has decreased quite a bit, meaning my remaining mortgage term has gotten shorter, and in turn less interest over time, if I understand it correctly.

    Leave a comment:


  • The White Coat Investor
    replied
    If I'm going to pay extra on a mortgage, I'm not going to pay it in advance, I'm going to pay extra on the principle.

    Leave a comment:


  • High Income Parent
    replied
    I once saw this with a car loan but it was spelled out in the paper work that as long as I was keeping up with payments schedule, there was no penalty for skipping one month because I had prepaid.
    Mortgages are a different animal. They buy and sell these all the time.
    It sounds like you haven't had the extra applied to principle so it might be okay but the only way to know it is safe is to get a written okay from the mortgage department. I would make sure it is written down.

    Leave a comment:


  • spiritrider
    replied
    I would be very careful about this. I don't know I would trust any level one CSR's. As has been pointed out, most mortgages would apply this to principal and not deferring future payments. It is possible as there are mortgages with this feature, but I would want this in writing before I would risk skipping a mortgage payment.

    Leave a comment:


  • FIREshrink
    replied
    it seems you've made a mistake. You've been sending extra money to the bank but not requiring they apply that extra money to principal.  Essentially you've lent $500 per month to your bank and not charged them any interest for the privilege.

    So yes, you can skip payments because you've already made them. Your bank thanks you for the interest-free loan.

    Leave a comment:


  • jfoxcpacfp
    replied




    I left this out, but they did tell me for sure that it would not be a late payment. According to their records, my next payment is due June 1st. So I should be ok, right?
    Click to expand...


    You're clear on that one.

    Leave a comment:


  • Vottomatic
    replied
    I left this out, but they did tell me for sure that it would not be a late payment. According to their records, my next payment is due June 1st. So I should be ok, right?

    Leave a comment:


  • adventure
    replied
    You need to get a clear answer from your bank on:

    1. Do you still have my mortgage, or did it get sold to another lender?

    2. How much do I owe.

    3. Why aren't my payments applied correctly? (meaning, to principle, and not future payments)?

    4. When is my next payment due?

    ... if you are really ahead, then technically you can skip one, but need the above to be sure!

     

     

    Leave a comment:

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