Our mortgage payment is due on the 1st of the month. On the 2nd, I got a call from our lender asking when our payment will arrive. After promising swift action, I got online to see if something went wrong with the automatic payment. Turns out the bill has been automatically paid on the 3rd of each month for the past three years. (I guess the mortgage crisis has encouraged my lender to begin erring on the side of caution.)
After reassuring my lender, I turned my attention to the fact that we have been consistently paying our bill late. If a bill is due on the 1st, it is technically late on the 2nd, and even later on the 3rd. In our defense, our loan agreement includes a grace period—we do not incur fees or penalties until the bill is 10 days past due. However, this is not the case for all loans, so it pays to follow my lender’s lead and err on the side of caution.
Following are some tips to help you avoid making late payments.
-Read the fine print to understand your responsibilities for making payments.
-If at all possible, save enough money to get one payment ahead.
-If your due date arrives before your paycheck, ask your lender to adjust your due date.
-If your payments are automatically deducted from your bank account, review the activity monthly to make sure all is going according to plan.
-If you make payments by mail, remember to allow several days for your payment to arrive.
-If you wire payments, allow at least one business day for the money to arrive.
-Paying a convenience fee to pay by phone could be an acceptable one-time alternative to making a late payment, which typically results in a late fee twice as high as the phone payment fee.
-If you have to miss a payment, communicate with your lender. Ask if they have a temporary hardship program.
-If financial problems persist, seek help.