Q: Should I continue making my monthly mortgage payment now that my home is listed for sale? The agent expects it to sell very quickly.
A: Absolutely. If you don’t make your payments on time, the lender could put the house into foreclosure, and you could completely trash your credit history.
Be sure you make the payments each month, on time, up until the month of the closing. Once the closing date is set, you can decide whether to make your regular monthly payment or wait and arrange for the mortgage to be paid out of the closing proceeds.
How do you decide? First, look to see when your mortgage payment is due. Most payments are due on the first of the month, although you will typically have a 10 or even 15-day grace period. If the closing is set for the 10th of the month or later, then you should make your regular monthly payment. Or, if your account is set up to automatically withdraw your payment and direct deposit it into the lender’s account on the first of the month, you should do that.
However, if your closing falls on the first few days of the month, then it makes sense to pay the amount due out of the closing proceeds, unless you’re in the position to make your payment by the 25th of the previous month (so the check has time to get to the lender, be deposited and clear before the closing).
Your real estate attorney can guide you further. Good luck with your sale.
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