Mortgage question

[Mistee]

We transferred from the bi-weekly home equity builder program at our mortgage company to their single payment a month plan in April, 2009.

We pay our house payments automatically each month from our checking account.

In May, 2009 the mortgage company sent us our usual monthly statement and said our next payment wasn't due until July 4, 2009.

Upon calling the mortgage company and checking our June, 2009 statement today, we don't have a payment due until August 4, 2009.

Would it be adviseable to call the company and stop the automatic payment for July? Now we could use this $1200 to pay down our debt.

Is this a "free" month because we paid three bi-weekly payments in Jan., 2009 and switched to monthly and we are owed this and wouldn't suffer any dire consequences because we opted to skip the month?

[creditcardfree]

I think you need to ask your mortgage company. They will give you the best answer.

[reptile411]

I agree. Nothing is free. Call them and demand an explanation as to why you have no payment this month. If they give you a reasonable explanation ask for it to be sent in writing and enjoy your extra $1,200 smackers.

[ernesto sidi]

The bi-weekly payment plan may have built up a credit amounting to a full month. when you make biweekly payments, in 3 months, 13 weeks, you end up with half month mortgage extra. If you were on the biweekly plan for longer than 6 months, then that would add up to a full month's payment. This amount may have transferred forward to where it indicated payment not due, but you have to check with the bank to make sure.

Why did you switch back to monthly payment? What was wrong with the biweekly setup? Just curious.

ernesto

[Mistee]

Thanks for the comments. I will let you know what the mortgage company said.

Regarding the switch, we will still make the 13th payment a year, but at the time of our choosing. The bi-weekly payments work okay, but sometimes the three payments fall at a time when our income tax or property taxes are due.

This forum really rocks with knowledgeable and caring people. Thank you.

[Mistee]

My husband called the mortgage company today and their answer was just as the poster ernesto above had stated. We had been on the plan for more than a year and a full month's extra payment had built up. We are entitled to the money as our June's automatic payment has paid for July and if we don't cancel the July payment, it will pay us ahead for August. She advised if we want the money in lieu of making August's payment in July. to go to our local bank where we have the automatic payment withdrawn from and tell them not to honor July's payment. We have our mortgage statement dated June 9 showing that our next payment isn't due until August 4, 2009. So we do have something to substantiate our doing this with the bank (as if they care one way or the other....probably they will care more because our money will stay in the bank for them to make more interest on instead of paying it out).

There will be no penalties of any kind assessed. I have already requested a confirmation of this action and that will be forthcoming.

Another side note is that we pay our own taxes and insurance so there was no escrow account to put the extra monies into if that were possible.

We're going to enjoy the "smackers" like reptile 411 above said LOL. Atleast part of it and the rest will go to our savings to accomodate that 13th payment before Dec., 2009.

Again thanks everyone!

[creditcardfree]

I'm glad you received a clear explanation. I'm sure your local bank will have no issue stopping your July payment. Enjoy!

[Mistee]

LOL thanks creditcardfree......and we will have no issue with spending half of the money either! Thanks