|
Dear Dr. Don,
My mortgage company tells me not to postdate my check. The mortgage payment is due on the first of the month. I
currently send it in before it is due and date it the day I send it in.
If I postdate it for the first of the month, then the payment can earn the interest in my bank
account for the previous month instead of letting the bank keep the interest.
I have also heard stories that if you postdate the check, the lender won't deposit it so you will
have late payments. The writing on the mortgage statement tries to scare you into sending the payment early.
Can I postdate the check so I can receive the interest in my account? Is there any mortgage law
that states I cannot postdate my mortgage check?
-- Rich Redux
Dear Rich,
Postdating your mortgage payment check is never a good idea. Rather than the lender not depositing your postdated check and causing you to incur late fees, it would be far more common for the lender to ignore the dated date and go ahead and deposit the check as soon as it's received. It's likely that your loan agreement specifically
speaks to postdated checks, allowing the lender to immediately deposit any payment it receives from you.
You should be more focused on the
laws concerning check writing. A Uniform Commercial
Code document
states the following:
A bank may charge against the account of a customer a check that is otherwise properly
payable from the account, even though payment was made before the date of the check, unless the customer has given
notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for
the period stated in Section 4-403(b) for stop-payment orders, and must be received at such time and in such manner
as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the
check described in Section 4-303. If a bank charges against the account of a customer a check before the date stated
in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include
damages for dishonor of subsequent items under Section 4-402.
So, it would be up to you to work with your bank when you postdate an item so the bank has the
information it needs to not pay the postdated check until the check is current.
The fee to accomplish the postdating complicates the economics of postdating a check to capture
interest income.
In addition, the conflict between the mortgage agreement term -- that they will immediately deposit
any payment -- and the postdated check notification agreement with your bank could leave your mortgage payment unpaid.
Between electronic payment options and choosing a bank account that pays interest based on daily
balances (versus monthly balances), you can structure your finances so you don't lose a month's interest by paying the
mortgage on or before the due date of the mortgage payment.
You don't need to postdate your checks to make this work.
Bankrate's Compare rates feature lets you compare
rates and compounding methods when you shop checking and savings accounts.
|
