BEWARE - Mortgage Pitfall!

My mortgage company lets me have until the 15th of the month before they assess a late payment penalty and give me a frowny face on my credit report.  That's pretty nice of them, isn't it?  It's like getting to keep your money another two weeks for free!  Except, it's not free.

This is a quote from LendingTree.com:

Finally, keep in mind that closed-end loans (e.g., a 30-year mortgage) differ in some respects from open-ended loans (e.g., a home equity line). If you make a payment later on an open-ended loan, you could owe more interest and a smaller amount of your payment might be applied to interest expense because the interest is calculated on the number of days between your payments

What does this mean?  It means that when you get the money to them on the fifteenth you are paying fifteen days late.  There is no "late payment fee" thrown at you, but the interest for those additional days is tacked on to what you already owe!  This usually doesn't rear its ugly head until you reach your last payment on the loan or you sell your property and settle up with your lender at closing.  You may actually have to bring money to the table to sell your house because of this additional interest.

The bottom line is this:  pay your mortgage on time.  If the 1st of the month falls on the weekend or a holiday, have your payment to the lender on the 30th or 31st of the preceding month.  Avoid this mortgage pitfall.  It could save you thousands.