Are Your Ready For Electronic Mortgage Payments? |
|
Mortgage interest rates ascended to record
heights when last week began for the first time in three decades. But the end of the week saw the 6.5% average climb more than half a point to nearly 7%. The Washington DC-based Mortgage Bankers Association of America reveals
that mortgage applications rose over 150% in comparison to a year ago.
The see-saw events chose an unfortunate time to occur, squashing many pending loans or leaving consumers no choice but to pay more than planned. Getting in your mortgage payment while it's due is no easy task whether or not the mail is on time. Apart from extra time during the holidays, new security measures have made the sorting process even slower, increasing chances of delays in your mail deliveries. Your previous practice of timing your mortgage check for a day before levying of late charges may start proving costly to your credit. Electronic mortgage payments could be a viable alternative. Lenders have been lenient on foreclosure and collection measures on military personnel and direct victims of September 11 events. Both moves have contributed positively in a trickle down effect on many mortgage holders. Nevertheless, penalties of late charges and credit report damage still remain the right of lenders. Electronic mortgage payments and phone transactions are not just cost-saving in postage terms but often also in terms of late fees and credit damage, provided your lender allows this option. Naturally, check payments are rapidly being replaced by electronic payments, according to a recent Check and Electronic Payment study by the Federal Reserve. The first comprehensive studies of the retail payments system by the Federal Reserve System in over 20 years find American consumers and businesses making 80 billion retail payments annually with 50 billion by check and 30 billion electronically. The decline of checks approximates 85% of non-cash payments following the last study in 1979 to almost 60% today. The study included feedback from nearly 1,300 financial institutions comprising banks, thrifts and credit unions and 89 electronic payment processors. "If you compare these results with 1979 research estimates it seems clear that the proportion of check payments is declining as substitution for electronic payment instruments accelerates", points out Cathy E Minehan, president of the Federal Reserve Bank of Boston. Though online payment options take minutes to be set up, preparing yourself and your computer for the new method requires time. It's usually a better option to make electronic payments directly to your lender or loan services rather than second-party electronic bill payment services. Particularly if only mortgage is being paid online. Most online visitors, the real consumers using the services rate almost all electronic bill payment services highly. However if you only want to pay mortgage online to simplify your life, you wouldn't want to face another administrative layer with a complaint in case of any doubt about your electronic payment. Then there are some online bill-pay services that carry charges. Should your lender charge for an electronic payment option, though most don't, it's up to you to decide if it's worthwhile? (Lenders mostly don't charge as electronic payments mean quicker cash and therefore additional interest on the funds. Consequently electronic payments mean more money for lenders.) Anyway the advice of the Pittsburgh, PA-based Computer Emergency Response Team Coordination Center or CERT/CC is to start with a well secured home computer equipped with virus protection to keep bugs out, firewall for cyber thugs and a secure Internet browser encrypting confidential information being exchanged. On sign up, a password is provided for the electronic bill payment service. CERT/CC advises frequent change and utmost secrecy even from the lender or third party online bill-payment service. The private policy of the lender's website also needs to be read before sign up. Proper private policies specify the use of your information. You also have new rights by federal law to choose to bar financial institutions from passing your private details for marketing purposes. Despite notifying your lender from sharing your information in the real world, simply using their website for electronic bill-payment can expose you to cyber marketing or spam. The Federal Trade Commission, the authority on online commerce, urges an understanding of the procedure in the event of problems with payment inclusive of your lender's policy to resolve complaints, for instance late posting of payment, failure to post payment and other problems. Initially an account has to be designated, mostly a checking account for payment to be drawn on a specified date every month or on your request. With the former on-time payments can be fixed and the latter suits those whose cash flow may be erratic. |
