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During this economy, it is wiser to

October 9th, 2010 at 05:30 pm


be one mortgage payment ahead, or keep that payment in the EF?

I'm presently at $14,750 (I do move money in and out of it because the interest rate is 1.3%. The $750 to be withdrawn will take care of a $425 tuition payment to school and a $325 payment to the credit card). DH's paycheck will be paid on the 15th, as will be the rental property income. I've worked the budget numbers and I believe that we could remain solvent on the money remaining in the checking account after taking a mortgage payment from the balance.

So, do I leave the EF at $14,000 and remain right on target with the mortgage (making it on the date that is due - I pay online at the mortgage company website, so there isn't a chance of it being late or anything like that - and there isn't a fee for that either), or do I drop the EF to $12,250 and have a leeway of six weeks prior to the next mortgage payment?

I'm feel certain the DH's job is safe, but I'm seeing all of these things in the media about foreclosures and am wondering if I should keep the money in EF.

What say you?

Posted in Uncategorized | 9 Comments »

9 Responses to “During this economy, it is wiser to”

  1. Toyguy1963 Says:
    October 9th, 2010 at 06:36 pm 1286645805
    1286645805

    Just my opinion but I like the idea of paying extra on the mortgage.

  2. dmontngrey Says:
    October 9th, 2010 at 07:25 pm 1286648739
    1286648739

    My opinion is this is six of one, half dozen of the other. Same thing in my mind. Do what ever makes you sleep easier. The point of an emergency fund is so you can pay your bills in the event of an emergency. If you leave the money in the EF, you can just pay towards the mortgage if something were to happen. Worry about it now or worry about it then. Either way, it sounds like the money is available to you.

  3. Aleta Says:
    October 9th, 2010 at 09:17 pm 1286655464
    1286655464

    Way before we started climbing out of debt, we always had one mortgage papment paid ahead. I just always felt more secure that the mortgage would be paid in case we had less money or we forgot. We just applied as much money to our emergency fund as we could. You have to do what makes you sleep better at night.

  4. creditcardfree Says:
    October 9th, 2010 at 09:36 pm 1286656570
    1286656570

    I agree. It is the same thing. Make sure the payment ahead shows with your mortgage company. Personally, I am one to keep the money in the EF.

  5. M E 2 Says:
    October 10th, 2010 at 03:01 am 1286676065
    1286676065


    How exactly does one make a payment ahead? I get the paying extra every month. If I were to send my mortgage company 2 payments when my monthly payment is due, it would just be recorded as extra money towards the principal. Next month, I'd get a/the bill for my regular payment. A payment ahead, to me, implies that if necessary, one could skip a monthly payment.

  6. momcents Says:
    October 10th, 2010 at 03:10 pm 1286719828
    1286719828


    My mortgage is held with Charter One Bank (CCO) and I always make my payment on line. I have made two payments at a time (separately, careful not to have the second one going extra to principle). The first one was for May 1st (the month I was paying it), and the second one was registered for June 1st. According to both the online amortization chart and the confirmation mailing, my next mortgage payment was due July 1. I also have a two week grace period, making my payment acceptable up to July 14th prior to any late fees applied. Maybe that isn't the case with all mortgages, but it is with the one that I've got with CCO Mortgage.

  7. Aleta Says:
    October 10th, 2010 at 05:53 pm 1286729631
    1286729631

    When we were paying our mortgage monthly, we were using coupon books but I think that momcents says it best. I just make sure that I always print a receipt with a confirmation number on it.

  8. MonkeyMama Says:
    October 10th, 2010 at 07:47 pm 1286736465
    1286736465

    In this economy, I'd rather have cash!

  9. Homebody Says:
    October 11th, 2010 at 04:05 pm 1286809523
    1286809523

    I agree with Monkey. $14,000 for a family does not seem like that much of an E-fund. But then it was way more than I had when I was raising kids!!

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