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Given how my loan will probably be re-serviced by different lenders many times over the course of the loan, what is the best way to establish a paper trail of timely payments? My gut feel says that if I use a combination of certified mail, with a personal check, I can then use my bank statements to prove payment. Also, I'm not convinced that sending a payment electronically, even through my bank is the way to go, although it seems to me to be equivalent.
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Either way is fine. E payments go through your bank anyway. I've done both and had no trouble with documenting the payments.
My last mortgage I used to pay in person at the bank with a check on the 15th of every month. Held on to my money til the last minute. Screw corporate America!
Your credit report will show untimely payments, so you are way overthinking this in my opinion.
Automatic draft with the mortgage company is the easiest way to pay in general, because it typically will transfer if your loan is sold. Meaning you won't have to change anything. It makes those transitions very easy.
There are many options, even electronically. Your exact selection determines who is at fault if something goes wrong. NONE OF THESE METHODS ALLOW YOU THE LUXURY FROM NOT OPENING YOUR STATEMENT (trust me on this - explanation to follow).
BILLPAY - Where you go into your bank account and instruct them to send off a check to the mortgage company.
AUTO BILL PAY - Same as above, but you set your billpay to automatically sent the same amount each month.
Problem with this method: if your payment increases due to escrow adjustment, your mortgage payment will be short (lender may refuse to accept). This is how I came close to making a 30 day late payment......I never opened the statement to see my taxes went up $100 a month).
ACH - set up through your mortgage company to automatically draft your mortgage payment each month. This method should survive any changes in servicing or changes in payment. Note: when loan is sold it can take up to 30 days for the ACH to be transferred, without detriment to mortgagor. If you see your payment has not been pulled, do be proactive and call your new mortgage company. With ACH in place, there will be no late fees. Also, your payment may not be recorded late if due to loan servicing transfer.
ACH or PAYROLL deposit into 3rd account where payment is pulled. Many people have $XXX come out of their paycheck into a specific account and then have an ACH for the mortgage to be pulled from that account. Example: John and Mary each have $1000 come out of their paycheck into their Wells checking account. ABC Mortgage then pulls their $1950 mortgage from their Wells account. Payment goes up. John and Mary always had a cushion of $150 to pay the mortgage. So, a few months later after the cushion is drained, the mortgage payment can't be pulled from this account.
Moral of the story, have the mortgage company set up the ACH and have overdraft for the account that pays the mortgage.
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