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danielleandscott
My new 71 Super Beetle
Member since 5/05 13476 total posts
Name:
Scott
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Mortgage Grace Period
I learned something in Real Estate Class yesterday that I would like to tell you all.
For those that have mortgages. I know there is usually a grace period after the due date of your mortgage payment. Lets say your mortgage is due on the first but the next 10 days is the grace period. I know a lot of people that pay their mortgage during the grace period. I know I have done it in the past too. Not anymore now that I heard that it can mess up your credit.
Our teacher told us a story that 20 years ago his CPA told him to stop paying his mortgage on the first and to let his money stay in the bank the extra 9 days to collect interest. Then pay the day b4 or the day of that the grace period ends. He did this for the next 20 years and he then went to sign up for an american express Platinum card and he got declined. He called Amex and they told him that his credit wasnt that good....He didnt know why. He ended up finding out that the place he pays his mortgage to was putting him down as a late payment for the past 20 years. Needless to say it took him a year and a half to get his credit back to what it once was.
Scott
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Posted 5/19/06 6:47 AM  |
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btrflygrl
me and baby #3!
Member since 5/05 12013 total posts
Name:
Shana
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Re: Mortgage Grace Period
ours is due the 1st and we can pay it until the 16th with no late fees
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| Posted 5/19/06 8:22 AM |
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VickiC
Rocking the party
Member since 5/05 4937 total posts
Name:
Vicki
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Re: Mortgage Grace Period
Posted by btrflygrl
ours is due the 1st and we can pay it until the 16th with no late fees
Yes, but you're missing Scott's point I think. You may not have late fees until the 16th, but your payment is still late. Therefore, the mortgage company could mark you down on your credit rating as paying late.
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| Posted 5/19/06 8:27 AM |
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Lisa
I'm a PANK!!!
Member since 5/05 22334 total posts
Name:
Professional Aunts No Kids
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Re: Mortgage Grace Period
the grace period not only applies to mortgages BUT also your credit cards and other loans. There really isnt ANY grace period....period!!
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| Posted 5/19/06 8:32 AM |
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LuckySV
LIF Adult
Member since 10/05 4675 total posts
Name:
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Re: Mortgage Grace Period
I've never paid during the grace period but I always knew that I could if I had to. I never knew it would be considered late. Thanks for posting this!
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| Posted 5/19/06 8:37 AM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: Mortgage Grace Period
Posted by danielleandscott
Our teacher told us a story that 20 years ago his CPA told him to stop paying his mortgage on the first and to let his money stay in the bank the extra 9 days to collect interest. Then pay the day b4 or the day of that the grace period ends. He did this for the next 20 years and he then went to sign up for an american express Platinum card and he got declined. He called Amex and they told him that his credit wasnt that good....He didnt know why. He ended up finding out that the place he pays his mortgage to was putting him down as a late payment for the past 20 years. Needless to say it took him a year and a half to get his credit back to what it once was.
Scott
Scott:
Sorry but thats a load of horsecrap from your instructor. Most banks won't even flag you with a late payment till 30 days AFTER your due date.
So you can even make payments after your grace period... but keep it within 30 days of being late and you *may* be fine.
Obviously the key word is *may*.... but you won't get any dings on your report by paying within the grace period. In your friend's case with AMEX.... well AMEX f'ed up and they should be reported.
There are tons of articles on the web documenting this.
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| Posted 5/19/06 10:22 AM |
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BrunetteMom
LIF Adult
Member since 8/05 1480 total posts
Name:
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Re: Mortgage Grace Period
Posted by DjPiLL
Posted by danielleandscott
Our teacher told us a story that 20 years ago his CPA told him to stop paying his mortgage on the first and to let his money stay in the bank the extra 9 days to collect interest. Then pay the day b4 or the day of that the grace period ends. He did this for the next 20 years and he then went to sign up for an american express Platinum card and he got declined. He called Amex and they told him that his credit wasnt that good....He didnt know why. He ended up finding out that the place he pays his mortgage to was putting him down as a late payment for the past 20 years. Needless to say it took him a year and a half to get his credit back to what it once was.
Scott
Scott:
Sorry but thats a load of horsecrap from your instructor. Most banks won't even flag you with a late payment till 30 days AFTER your due date.
So you can even make payments after your grace period... but keep it within 30 days of being late and you *may* be fine.
Obviously the key word is *may*.... but you won't get any dings on your report by paying within the grace period. In your friend's case with AMEX.... well AMEX f'ed up and they should be reported.
There are tons of articles on the web documenting this.
and how does someone go paying their mortgage late for TWENTY years and NOT know this?
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| Posted 5/19/06 10:24 AM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Mortgage Grace Period
Posted by DjPiLL
Posted by danielleandscott
Our teacher told us a story that 20 years ago his CPA told him to stop paying his mortgage on the first and to let his money stay in the bank the extra 9 days to collect interest. Then pay the day b4 or the day of that the grace period ends. He did this for the next 20 years and he then went to sign up for an american express Platinum card and he got declined. He called Amex and they told him that his credit wasnt that good....He didnt know why. He ended up finding out that the place he pays his mortgage to was putting him down as a late payment for the past 20 years. Needless to say it took him a year and a half to get his credit back to what it once was.
Scott
Scott:
Sorry but thats a load of horsecrap from your instructor. Most banks won't even flag you with a late payment till 30 days AFTER your due date.
So you can even make payments after your grace period... but keep it within 30 days of being late and you *may* be fine.
Obviously the key word is *may*.... but you won't get any dings on your report by paying within the grace period. In your friend's case with AMEX.... well AMEX f'ed up and they should be reported.
There are tons of articles on the web documenting this.
I agree with this. I verified with Equifax and Experian. I've been paying on the 10th of the month for years and my credit has remained the same.
Message edited 5/19/2006 10:25:42 AM.
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| Posted 5/19/06 10:25 AM |
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patti08
Happy
Member since 5/05 3893 total posts
Name:
Patti
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Re: Mortgage Grace Period
Scott, thank you so much for posting this, I had no idea it could have that effect.
We've been sending payment on or a few days after due date and will now change that. I think you may have saved us from a very unecessary credit score fiasco down the line.
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| Posted 5/19/06 10:30 AM |
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june262004
But I love the Snow!
Member since 5/05 15379 total posts
Name:
Kristin
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Re: Mortgage Grace Period
Posted by DjPiLL
Posted by danielleandscott
Our teacher told us a story that 20 years ago his CPA told him to stop paying his mortgage on the first and to let his money stay in the bank the extra 9 days to collect interest. Then pay the day b4 or the day of that the grace period ends. He did this for the next 20 years and he then went to sign up for an american express Platinum card and he got declined. He called Amex and they told him that his credit wasnt that good....He didnt know why. He ended up finding out that the place he pays his mortgage to was putting him down as a late payment for the past 20 years. Needless to say it took him a year and a half to get his credit back to what it once was.
Scott
Scott:
Sorry but thats a load of horsecrap from your instructor. Most banks won't even flag you with a late payment till 30 days AFTER your due date.
So you can even make payments after your grace period... but keep it within 30 days of being late and you *may* be fine.
Obviously the key word is *may*.... but you won't get any dings on your report by paying within the grace period. In your friend's case with AMEX.... well AMEX f'ed up and they should be reported.
There are tons of articles on the web documenting this.
I'd have to AGREE WITH YOU Pill GASP 
I work for the bank dealing with Mortgages.
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| Posted 5/19/06 11:05 AM |
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danielleandscott
My new 71 Super Beetle
Member since 5/05 13476 total posts
Name:
Scott
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Re: Mortgage Grace Period
Posted by Blu-ize
Posted by DjPiLL
Posted by danielleandscott
Our teacher told us a story that 20 years ago his CPA told him to stop paying his mortgage on the first and to let his money stay in the bank the extra 9 days to collect interest. Then pay the day b4 or the day of that the grace period ends. He did this for the next 20 years and he then went to sign up for an american express Platinum card and he got declined. He called Amex and they told him that his credit wasnt that good....He didnt know why. He ended up finding out that the place he pays his mortgage to was putting him down as a late payment for the past 20 years. Needless to say it took him a year and a half to get his credit back to what it once was.
Scott
Scott:
Sorry but thats a load of horsecrap from your instructor. Most banks won't even flag you with a late payment till 30 days AFTER your due date.
So you can even make payments after your grace period... but keep it within 30 days of being late and you *may* be fine.
Obviously the key word is *may*.... but you won't get any dings on your report by paying within the grace period. In your friend's case with AMEX.... well AMEX f'ed up and they should be reported.
There are tons of articles on the web documenting this.
I agree with this. I verified with Equifax and Experian. I've been paying on the 10th of the month for years and my credit has remained the same.
I am just telling you what I learned in school yesterday - It even discusses the subject in the text book....He was paying the mortgage during his grace period because his CPA said he could do it that way...
Message edited 5/19/2006 11:05:51 AM.
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| Posted 5/19/06 11:05 AM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: Mortgage Grace Period
Posted by danielleandscott
I am just telling you what I learned in school yesterday - It even discusses the subject in the text book....He was paying the mortgage during his grace period because his CPA said he could do it that way...
Yeah but of course an instructor is going to say to do it "by the book".
Thats like the driving instructor telling everyone that you must come to a complete FULL stop at a stop sign. Or also saying that jaywalking is illegal. But do we follow these rules? Nope. 
There has never been any documented proof of a bank willfully destroying a person's credit because they paid their mortgage within the grace period. If this was done in the past, it was either done by error, or it was reported prematurely.
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| Posted 5/19/06 11:10 AM |
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Eva Luna
Be kind...life's hard!
Member since 8/05 4750 total posts
Name:
God, bless & heal my DH, JenG's DH Rob & DebG
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Re: Mortgage Grace Period
I have to agree with Rich.
It has nothing to do with the grace period...it has to do with when the mortgage company reports his payment to the credit bureaus. Maybe he was paying the 10th of the following month?  So if it was due 4/1 his payment would be applied 5/10?
In any case...it's all about when the company (credit, mortgage, car) reports your payment as 30 days late...
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| Posted 5/19/06 11:16 AM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Mortgage Grace Period
Posted by sasha
I have to agree with Rich.
It has nothing to do with the grace period...it has to do with when the mortgage company reports his payment to the credit bureaus. Maybe he was paying the 10th of the following month? So if it was due 4/1 his payment would be applied 5/10?
In any case...it's all about when the company (credit, mortgage, car) reports your payment as 30 days late...
I just had this conversation with my mortgage dude at Chase (who I still like)
He said it should not effect your credit score unless you are so close to the grace period, it posts after the grace period.
Then it could. So maybe Scott's instructor was referring to a situation where the payment was so close to the end of the grace period, it posted after.
I have to edit this by saying that if that happened and the late fees never got paid, that could really mess up the credit score.
Message edited 5/19/2006 11:35:41 AM.
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| Posted 5/19/06 11:34 AM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: Mortgage Grace Period
This is why a lot of people have the money automatically deducted from their checking account by the bank itself (not an online bill pay).
You can tell the bank that has your mortgage to pull the money on the 8th of every month. Once they pull it... it should be posted that same day since they are the ones doing the pulling.
Then if for some reason they don't pull it on time... they are the ones that should be responsible... not you.
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| Posted 5/19/06 11:41 AM |
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luvsun27
Check out my cool glasses
Member since 5/05 8135 total posts
Name:
Kim
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Re: Mortgage Grace Period
Posted by DjPiLL
This is why a lot of people have the money automatically deducted from their checking account by the bank itself (not an online bill pay).
You can tell the bank that has your mortgage to pull the money on the 8th of every month. Once they pull it... it should be posted that same day since they are the ones doing the pulling.
Then if for some reason they don't pull it on time... they are the ones that should be responsible... not you.
Exactly. Thank god for over-draft protection...because sometimes the money doesn't get to the bank until after the mortgage has been pulled 
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| Posted 5/19/06 11:47 AM |
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Diana1215
Living on a prayer!!!
Member since 10/05 29450 total posts
Name:
Diana
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Re: Mortgage Grace Period
Posted by DjPiLL
Posted by danielleandscott
I am just telling you what I learned in school yesterday - It even discusses the subject in the text book....He was paying the mortgage during his grace period because his CPA said he could do it that way...
Yeah but of course an instructor is going to say to do it "by the book".
Thats like the driving instructor telling everyone that you must come to a complete FULL stop at a stop sign. Or also saying that jaywalking is illegal. But do we follow these rules? Nope.
Actually, my instructor at LISORE was the one who told us that we didn't have to pay until it got closer to the late date - before that I was sending my checks on the 1st of the month - now I send them on the 9th or so.
Message edited 5/19/2006 11:50:13 AM.
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| Posted 5/19/06 11:49 AM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Mortgage Grace Period
Posted by luvsun27
Posted by DjPiLL
This is why a lot of people have the money automatically deducted from their checking account by the bank itself (not an online bill pay).
You can tell the bank that has your mortgage to pull the money on the 8th of every month. Once they pull it... it should be posted that same day since they are the ones doing the pulling.
Then if for some reason they don't pull it on time... they are the ones that should be responsible... not you.
Exactly. Thank god for over-draft protection...because sometimes the money doesn't get to the bank until after the mortgage has been pulled
Yep-it's automatic by the bank for me..I have two mortgages with two companies and one get's pulled on the 8th and one on the 10th. Its 24 hr turnaround but I still wouldn't wait for the 15..
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| Posted 5/19/06 11:54 AM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Mortgage Grace Period
Posted by DjPiLL
This is why a lot of people have the money automatically deducted from their checking account by the bank itself (not an online bill pay).
You can tell the bank that has your mortgage to pull the money on the 8th of every month. Once they pull it... it should be posted that same day since they are the ones doing the pulling.
Then if for some reason they don't pull it on time... they are the ones that should be responsible... not you.
MY DH has seen this affect credit scores- you are still responsible if the bank pulls it late- or he has seen cases were they don't pull it at all- always check
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| Posted 5/19/06 11:58 AM |
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june262004
But I love the Snow!
Member since 5/05 15379 total posts
Name:
Kristin
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Re: Mortgage Grace Period
You also save money for having the bank pull it.
I know Wamu gives you .25% discount for letting US take the payment out of your account.
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| Posted 5/19/06 12:11 PM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Mortgage Grace Period
Yep-on my HELOC I get .25% discount.
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| Posted 5/19/06 12:17 PM |
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MsMBV
:P
Member since 5/05 28602 total posts
Name:
Me
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Re: Mortgage Grace Period
Posted by DjPiLL
This is why a lot of people have the money automatically deducted from their checking account by the bank itself (not an online bill pay).
You can tell the bank that has your mortgage to pull the money on the 8th of every month. Once they pull it... it should be posted that same day since they are the ones doing the pulling.
Then if for some reason they don't pull it on time... they are the ones that should be responsible... not you.
I do this, and it also juts makes things easier to know that it is paid every month.
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| Posted 5/19/06 12:52 PM |
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MsMBV
:P
Member since 5/05 28602 total posts
Name:
Me
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Re: Mortgage Grace Period
Posted by june262004
You also save money for having the bank pull it.
I know Wamu gives you .25% discount for letting US take the payment out of your account.
REALLY??? I have my mortgage thru WAMU & they did not offer this to me. Do you have to have a WAMU bank account for them to offer the .25%?
Message edited 5/19/2006 12:53:11 PM.
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| Posted 5/19/06 12:52 PM |
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IrishMom77
Brothers!!
Member since 8/05 3498 total posts
Name:
Roseann
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Re: Mortgage Grace Period
We pay ours like that every month (for the past year) and I just had my credit pulled and there was nothing on it at all. My DH is a Financial Rep with WAMU and says you have the grace period and most companies wont slap you with a fee until AFTER 30 days. We usually pay it on the 5 or 6th, depending on when we get paid
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| Posted 5/19/06 4:11 PM |
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june262004
But I love the Snow!
Member since 5/05 15379 total posts
Name:
Kristin
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Re: Mortgage Grace Period
Posted by MsMBV
Posted by june262004
You also save money for having the bank pull it.
I know Wamu gives you .25% discount for letting US take the payment out of your account.
REALLY??? I have my mortgage thru WAMU & they did not offer this to me. Do you have to have a WAMU bank account for them to offer the .25%?
Yes. I do HELOCS and we give .25% discount. But it has to be out of a WAMU checking account. BUT wamu has FREE checking
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| Posted 5/19/06 4:20 PM |
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