Can I Pay 1/2 My Mortgage Payment Twice Per Month?

Dear MortgageMaster,

I have spent the last 6 months splitting my mortage payment in half. I will send half the first week of the month and the second half no later than the 18th of the month. I have explained to them that I am a childcare provider and that I pay them as much as possible as soon as possible. I have asked for my due date to be reset for nine consecutive months to reduce or eliminate the late fees that continue to accrue on my account. They refuse to do so. My question is, is there a regulation that mandates that the mortgage company applies funds as received and re figures interest on the outstanding principle or can they hold the funds unapplied and continue to collect interest as if no effort or money was received? My mortgage company it First Franklin Financial Services

Julie

Dear Julie,

Insofar as a regulation that mandates that a mortgage company accept your 1/2 payments as they are received, I do not know of any. Nor am I familiar with any mortgage company that will accept 1/2 payments twice a month on First Mortgages. Since HELOC's are lines of credit, you can arguably use this payment method as long as both 1/2 payments are received before the "late" date. Macquarie Bank, an Australia-based bank, has a heloc first that can be used in the manner you are talking about (as could any Heloc 1st). Other than a Macquarie First, I do not know of any lenders who are set-up to accept payments in the manner described. Perhaps you can try and put aside one payment over the next few months, put it in a separate checking account, and then when you have enough saved up, send it to the lender. Then you will always be on schedule. Also, given the current markets, you may be able to negotiate a loan modification changing your due date. Lenders are becoming increasingly flexible! Good luck!

MortgageMaster