Mortgage Payments Via Bank Draft


My mortgage company takes out my mortgage payment automatically by bank draft every 2 weeks. I don’t mail the payment, they simply take it out of my account. I notice, when I examine my monthly bank statement, that they don’t take the money out of my account until 2-4 days after my account. Doesn’t this add to my finance charges? What do I need to do – insist that they take it out on time?


Quite often the electronic request from the mortgage (or other company) for funds from your account is made the day of the payment. If the request falls on a weekend then your funds may not actually transfer until the next banking day. The time of the request is recorded and if there are insufficient funds when the actual transfer takes place then you get hit with the costs. Otherwise, the funds are transfered and your payment is on time. You should have a regular statement from your mortgage company that you can verify.

A simple phone call to your mortgage company (and some patience on hold) should give you the information you are looking for. You may want to write your request on paper and mail it to them asking for an explanation or clarification in writing.

Answered almost 10 years ago

What you’re dealing with here is the normal delay associated with electronic funds transfers (EFT). While the routing and account numbers you provided are in fact the keys to your checkbook, all direct debit authorizations in the U.S. still run through a system called the automated clearing house (ACH). To save transaction costs and system bandwidth, the vast majority of merchants (like your mortgage company) send their electronic transaction requests to the ACS in “batches” containing hundreds or even thousands of individual debit and credit authorizations.

ACH payment processing involves lots of sorting, hashing, routing and interest/fee calculations between the myriad of banks on the system. Usually, however, a payment is considered posted on the date of your actual ACS authorization; meaning you are most likely being credited days before your account balance actually reflects it.

For more certainty, determine your interest per diem (divide your monthly mortgage interest dues by 30), then check your monthly statement to see how much interest you paid.

Lastly, I’m also curious about the logic behind those bi-weekly mortgage payments. If mortgage acceleration is on your mind, we and one of the Federal Reserve banks have some safer and more effective ways to pull that off…

Answered almost 10 years ago
Lance J.
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