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Old 04-07-2016, 09:10 AM
 
168 posts, read 266,567 times
Reputation: 239

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Hi folks!

We are selling our house and closing is scheduled for the 10th of May.

My payment is "due" on the first of each month, but late fees aren't assessed until 15 days late- i.e. the 16th.

Is it common/OK to not make that last month's payment in a scenario like this?

We are currently paying both a mortgage and rent payment which is stretching us thin, so I'd like to not make that last payment if I can do so without penalty/negative consequences.
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Old 04-07-2016, 09:37 AM
 
4,791 posts, read 11,966,331 times
Reputation: 3453
Quote:
Originally Posted by Noregrets11 View Post
Hi folks!

We are selling our house and closing is scheduled for the 10th of May.

My payment is "due" on the first of each month, but late fees aren't assessed until 15 days late- i.e. the 16th.

Is it common/OK to not make that last month's payment in a scenario like this?

We are currently paying both a mortgage and rent payment which is stretching us thin, so I'd like to not make that last payment if I can do so without penalty/negative consequences.
No need to make the 05/01 payment when closing on 05/10.
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Old 04-07-2016, 10:23 AM
 
Location: Martinsville, NJ
6,162 posts, read 11,237,215 times
Reputation: 3957
Quote:
Originally Posted by Noregrets11 View Post
Hi folks!

We are selling our house and closing is scheduled for the 10th of May.

My payment is "due" on the first of each month, but late fees aren't assessed until 15 days late- i.e. the 16th.

Is it common/OK to not make that last month's payment in a scenario like this?

We are currently paying both a mortgage and rent payment which is stretching us thin, so I'd like to not make that last payment if I can do so without penalty/negative consequences.
You're kidding, right?
NO, it is NOT common or OK to NOT make payment.
You owe the money. That doesn't change.
And if you are delinquent on your payments, your closing will likely be put in jeopardy. Part of the process in selling your home is discharging the mortgage by paying off the loan.
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Old 04-07-2016, 10:35 AM
 
Location: southwest TN
8,224 posts, read 14,918,804 times
Reputation: 14983
It doesn't matter if late penalties are not assessed for 5 days or 20 days. If it's due on the 1st and paid on the 2nd, it is still late. Penalty assessment is a separate issue.

Credit repair is costly. Late payments create credit issues.
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Old 04-07-2016, 10:41 AM
 
40,092 posts, read 24,337,358 times
Reputation: 12616
You need to talk to your bank. The pay-off amount will reflect whatever is owed. If you are going to make the payment, the payment will be reflected in your pay-off amount. If you don't make the payment, that will also be reflected.
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Old 04-07-2016, 11:52 AM
 
Location: Phoenix, AZ area
3,168 posts, read 2,929,352 times
Reputation: 3803
Some of these responses are like people don't actually understand payoff statements but felt the need to chime in with nonsense anyway. Your payoff reflects the payoff plus interest covering all those days and already assumes you wont be making any further payments unless you got an altered payoff statement by telling them you will be making a payment. You do not need to make your payment in the same month you are closing, worst case you pay a late fee if you close past the cutoff period. You wont see a credit ding or any of the other BS people are talking about.

Here is a sample payoff statement I found online that sums it up completely. The 1st paragraph addresses the late fee. The 2nd is the breakdown in fees and what date the statement is good until which will always be the end of a month. The interest is the daily interest for 2 months, the interest in your case would be the April accrual and the May accrual which will be identical without a new payment, they wont likely refund the interest either when you close before the end of the month. The final paragraph addresses what happens if you close beyond that month assuming you never make another payment since the time of the payoff letter request.

Closing on the 10th- should I pay last mortgage payment?-misc.jpg

Last edited by AZ Manager; 04-07-2016 at 12:08 PM..
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Old 04-07-2016, 11:53 AM
 
498 posts, read 364,053 times
Reputation: 1678
Quote:
Originally Posted by TimtheGuy View Post
No need to make the 05/01 payment when closing on 05/10.
This is NOT correct. OP, make your payment or deal with creditors for the next decade.
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Old 04-07-2016, 12:26 PM
 
168 posts, read 266,567 times
Reputation: 239
So, the answers above range from 'pay it, or die a loser' (hyperbole added for fun!) to 'don't worry about'. Guess my confusion is well founded, and I'm not alone!

Seems to me like the bank IS getting paid for May....from the proceeds from the sale of my house, and within the grace period before late penalties are assessed.

Trust me- I pay my bills on time and have no intention of cheating the company. Just thought there would be no point in paying the mtg payment for May....

I suppose I'll just have to call my mortgage company to get a clear answer.
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Old 04-07-2016, 12:33 PM
 
168 posts, read 266,567 times
Reputation: 239
Quote:
Originally Posted by AZ Manager View Post
Some of these responses are like people don't actually understand payoff statements but felt the need to chime in with nonsense anyway. Your payoff reflects the payoff plus interest covering all those days and already assumes you wont be making any further payments unless you got an altered payoff statement by telling them you will be making a payment. You do not need to make your payment in the same month you are closing, worst case you pay a late fee if you close past the cutoff period. You wont see a credit ding or any of the other BS people are talking about.

Here is a sample payoff statement I found online that sums it up completely. The 1st paragraph addresses the late fee. The 2nd is the breakdown in fees and what date the statement is good until which will always be the end of a month. The interest is the daily interest for 2 months, the interest in your case would be the April accrual and the May accrual which will be identical without a new payment, they wont likely refund the interest either when you close before the end of the month. The final paragraph addresses what happens if you close beyond that month assuming you never make another payment since the time of the payoff letter request.

Attachment 168013
Thank you, AZ Manager!
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Old 04-07-2016, 02:00 PM
 
Location: Boise, ID
8,043 posts, read 23,700,006 times
Reputation: 9334
Quote:
Originally Posted by Bill Keegan View Post
You're kidding, right?
NO, it is NOT common or OK to NOT make payment.
You owe the money. That doesn't change.
And if you are delinquent on your payments, your closing will likely be put in jeopardy. Part of the process in selling your home is discharging the mortgage by paying off the loan.
Interesting, I came in to give exactly the opposite answer. The OP isn't suggesting they not make the payment, just that the payment may be made out of closing.


OP, in my area, it is normal and customary for the title company to get the proration for the payoff as if you weren't making that final payment, and if you make a payment within the week before the closing, they may have to request a 2nd payoff.


So find out from your agent and/or closing officer which is normal in your area, and what they would prefer to make things go the most smoothly.


Late payments on mortgages are not reported unless they are more than 30 days late. So as long as your closing isn't delayed, I probably wouldn't make the payment unless you make it really early.
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