When applying for a mortgage, many of your questions probably involve aspects of the application process itself. But you might also have some questions about what you can expect after the process is complete and you move into your new home. For example, you may be wondering how you can submit your mortgage payments. Let’s go over some common methods.
Types Of Payment Method
- Automated payments. One of the most popular methods for making mortgage payments is automatically through once bank account. You can set up payments to come out of your checking account or your savings account. Regardless of which you choose, you can expect the payments to transfer on the same day each month. If the amount due increases or decreases, the correct amount will go through automatically every time.
Pros:
The main benefit of this method is how easy and convenient it is. If you are looking for a “set and forget” way to pay off your mortgage, this is the way to do it. You can customize automated payments as well if you are looking to make larger payments than the minimum due each month. Just make sure that you talk with your lender and explain to them in advance that the extra you pay should be applied to the principal of the loan, not just the interest.
Cons:
The biggest drawback of automated payments is that they are harder to control. They will leave your account each month on the same day by default unless you do something to prevent it. So, if your account balance tends to be low, you may want to avoid this method so that you do not accidentally end up overdrawing. - Manual payments online. If you do not want to make automatic payments on your mortgage, but you would like the convenience of paying online, you can always submit your payments manually instead. You might be able to do this from inside your bank account. Alternatively, you may be able to visit the lender’s website and initiate the transfer there.
Pros:
As with automated payments online, you do not need to leave your home to pay on your mortgage. It only takes a few minutes to initiate your manual transfer. Additionally, you can decide on the exact date and time you do so (though you do need to pay on time each month). So, you are much less likely to overdraw your account by mistake. If you want to vary your mortgage payment amounts as well, this is an easy way to pay extra on months that you can and not on those that you cannot.
Cons:
The most significant potential drawback with this payment method is simply forgetting to send in your monthly mortgage payments on time. - Money order, check, cashier’s check, or certified check. If you would prefer not to pay your mortgage online, you can do so in the mail or even in person through a number of methods. Your lender might accept a money order, check, cashier’s check, or certified check.
Pros:
Some people feel more comfortable with these traditional payment methods than they do with sending online payments. It can be particularly reassuring to actually hand your payment to a human being.
Cons:
There are a couple of significant drawbacks to these methods. The first is that you generally need to pay some sort of a fee. This fee could be substantial. Over the course of a year, the fees can add up to quite a bit. The other drawback is that there is more time, effort, and hassle involved with these methods. That is particularly true if you mail your payment, since you need to wait for it to arrive. If the mail is late, your payment will be late as well. - Phone. The next payment option you can consider is over the phone. If you check your mortgage bill or your lender’s website, you should be able to find the appropriate phone number. There may or may not be a fee to pay for this service.
Pros:
Usually, this payment method is a rapid one. So, it is good for last-minute payments. Also, perhaps you are traveling with no internet connection in a remote area, or maybe your connection is simply down and you do not get data on your phone. Being able to submit a mortgage payment over the phone could help you get your payment in on time.
Cons:
Making a phone call requires time and effort, and some people may find it stressful. You will also use up phone minutes doing it. - Credit card, debit card or prepaid card (maybe). Depending on both your card issuer and your lender, you might be able to make a mortgage payment using a credit card, debit card or prepaid card.
Pros:
You may find this method fast and convenient. Plus, if you are in a situation where your bank account is temporarily overdrawn, a credit card may prevent you from lapsing in your mortgage payments.
Cons:
Borrowing money to pay your bills is always risky. If you are thinking of paying your mortgage with a credit card, make sure you actually will have the money to cover it and continue keeping up with future payments. You also may lose money through fees with this method.
Learn More About Making Mortgage Payments
Have questions about how to make your mortgage payments? First Residential Mortgage is here to answer them. Give us a call now at (540) 838-5868.
