As a salesman, my income varies widely, but my mortgage is steady at about $1,000 per month. If I pay $2,500 to the mortgage after a good month, and then have a bad month, is it OK to skip a payment?

Asked by Brady

7 Answers

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Answered by Brian Howell, Mortgage Broker in Castle Rock, CO
No Brady it usually isn't. I would recommend sending two separate checks for $1000-1250 about a week apart. That way you're paid ahead. I'm in sales too so this is something we regularly do after a strong month. Otherwise, your lender may just apply the difference to principal. | 01.06.14 @ 20:34
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:45
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Answered by moma
You are allowed to make 13 payments a year legally. So this way you are ahead on the payments. When you are a couple of months ahead then start making principal payments and continue making your regular mortgage payment. So your mortgage gets paid off quicker. Look at a mortgage calculator and put in some numbers | 01.11.14 @ 00:06
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:45
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Answered by JoeTaxpayer
Be very careful. If the bank gets a payment mid-cycle, say before the 15th (i.e. 15 days early) you need to confirm they'll apply it properly, to the next month's due date. Too close to that prior payment and they may mis-apply it to principal only, and the next payment is still due.

Keep in mind, if you manage to make early payments, you save no interest. If 2 people have identical 30 year mortgages, and one pays 15 days early, the other, 10 days late, but before penalty, the final payments are the same, no difference in interest.

What I recommend is to set up an account with direct debit. Instruct the lender to debit that account on the 7th or 8th or each month, and make deposits to it with this extra money. It will help you smooth out the bonuses and extra income. At the end of every year, or however your 12 month cycles go, see if that account is growing. If it start to get to be 4-6 months payments, then consider a prepayment of principal.

To 'moma' - no idea what you mean. Payments either go to interest+principal (the regular payments) or principal only. What is a 13th payment? I can pay extra principal with any monthly payment I wish. | 08.11.15 @ 22:58
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:45
Answered by Stacy Marcus, CDFA™ CFEI™ in New York, NY
No, you should never miss a payment. You do not get a credit for making a larger than required payment one month to use in a subsequent month. You will get charged late fees and penalties if you make no monthly payment. If you have additional income one month you should put it into a bank savings account - money market account - so you do not spend the money and have it in reserve if your income falls short in a subsequent month. Yes, interest rates are very low on deposits but penalty and late fees are very high and keeping that money in reserve for a short-fall is smart. If you build up a substantial balance you can start to invest some of the funds and grow your wealth. Working with a good financial advisor you will be able to forecast into the future and normalize your income flows so you can budget and invest wisely for your current and future needs and goals. | 10.03.15 @ 01:43
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:45
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Answered by Miriam
Use your bank's bill pay feature. Schedule one payment immediately and schedule the second payment for the next bill cycle. Then record the total amount in your check register right away. That way you get to take advantage of the extra money, relieve yourself of worrying about the next month's payments and the mortgage company gets your payments on schedule. | 10.24.15 @ 15:04
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:45
No. Mortgage has a larger impact on your credit than any other type of debt. Keep a reserve and/or separate account and put it on auto-pay. Note that most mortgages allow a 15 day grace period without a late fee. It's only if it's 30 days late that it is reported as 'late' to the credit bureaus. That's the one to avoid. Check with your servicer to confirm the grace period so you avoid / minimize late fees.
| 04.01.16 @ 18:33
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:45
Answered by Pouyan Broukhim, Mortgage Broker in Los Angeles, CA
No, No , No...don't ever do this. Make sure you have at least 6 months in reserves before you make any additional payments on your mortgage. Also the mortgage has the lowest rate therefore you should always pay down your credit card or other high yield debt you may have. | 05.19.16 @ 20:46
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:45
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