Mortgage Payments in Escrow: What You Need to Know
When you're selling a house that is currently in escrow and scheduled to close on September 2nd, mortgage payments can become a bit tricky. In this article, we'll explore whether you have to pay the August mortgage payment and what happens to your mortgage if your closing date is delayed or postponed.
Do You Have to Pay the August Mortgage?
Yes, you generally need to pay the August mortgage. Mortgage payments are typically due on the first of the month for the previous month's interest. Since the house is in escrow and closing is scheduled on September 2, you will be responsible for the August mortgage payment.
However, the final closing statement will often reflect any adjustments for prepaid or prorated amounts. Lenders and real estate agents can provide the specific details related to your situation. Therefore, it's advisable to reach out to your lender or real estate agent for further guidance.
Stay on Time with Your Payments
Administrations can go wrong, and transactions can get postponed or delayed. If you make the payment and the lender receives more out of escrow, your current lender will simply refund the over-payment. However, if you wait until September 2nd or later for the lender to receive the payoff, you might be reported as 30 days late on your mortgage payment, which can significantly harm your credit score.
It's never a good idea to skip a payment to avoid a late fee or potential credit score damage. Instead, make your payments on time and ensure that you are aware of the specific terms of your mortgage.
Should You Pay the September Mortgage?
As mentioned, you need to pay the August mortgage. Additionally, you may also need to pay the September mortgage if it is due on the first. You will either pay it directly or at the close of escrow. Your lender will provide a mortgage payoff amount to the escrow agent a few days before closing.
Missing this payment can cost you more than just a late fee; it can also result in a report on your credit score. Therefore, ensure that you make the payment on time, even if it means you have to make an extra payment early.
Special Circumstances and Delayed Closings
Most mortgages are due on the 1st but are not considered late until after the 15th. If your mortgage is set up this way, you might consider not paying it if the closing is delayed. If the closing date is pushed back, you could always make the payment by the 15th to avoid penalties. Always check with your lender to confirm your mortgage's payment schedule.
Be aware that prepaying the mortgage a day before closing might complicate your closing documents as the payoff amount will need to account for the new payment. Make sure to review all details with your lender or real estate agent to avoid any complications.
In summary, when selling a house in escrow and your closing date is September 2nd, you must pay the August mortgage. Delays or postponements can be detrimental, so always stay on top of your payments and seek advice from your lender or real estate agent for specific guidance.