When it comes to automatic mortgage payments, there are numerous benefits as well as drawbacks of this feature. Here we have mentioned some common things that you need to know before opting for automatic payments.
Pros of Automatic Payments
Automatic mortgage payments are the most common method people use to manage mortgage loans. Here are some benefits of online payments that encourage people to opt for this approach.
Timeliness
The biggest advantage of using this method is peace of mind, as you don’t need to worry about late payments. Instead of remembering to make monthly payments online, you can let your bank take care of your payments. Besides, automation can help you boost your credit score and develop a record of on-time payments.
Sustainability
If you are one of those who prefer eco-friendly methods, setting up automatic mortgage payments is ideal for you. This is because by using automatic payments you don’t have to use more paper, as you have to write a few checks and buy few stamps. Hence, you will use a paperless billing method that is safe and secure for the earth. Not to mention, you will also contribute to reducing emissions by receiving and sending fewer emails.
Security
Although some people fear that automatic payment methods are not safe, there are many reputable institutions that use secured methods for payments. These organizations use advanced security measures for online payment mechanisms. In fact, you choose a risky method when you use an unsecured mailbox to send a payment via checks. These paper bill payments also include your financial information, such as your credit card number or account number.
Cons of Automatic Payments
While automation offers many benefits, it also has its drawbacks. Here are some cons that you need to know about online mortgage payments.
Overdraft Fees
In some cases, payments can fluctuate in amount, and if you don’t notice, you might experience an overdrawn account. Overdraft fees can greatly vary, but the average fess is $34. In this case, it’s important to track your bank account and only leave enough money that can cover your automatic payments.
Unsubscribing Problems
This is the most common problem that people face. If you find the method invaluable and want to unsubscribe it in the future, you may experience several problems. For instance, the institute that offers you an automatic mortgage payment option may not respond to your request. In other cases, the process is too lengthy and complex that it takes days to unsubscribe automatic online payments.
Costly Mistake
Another problem is that automatic payments can do lead to costly mistakes. For instance, your home mortgage company can accidentally withdraw monthly payments twice at the same time. Although these mistakes are rare, they can still happen. You also need to know that recovering this amount can also be a headache for you.
Automatic Payments Bottom Line
So, now you may decide whether you need to opt for automatic mortgage payments. It is important to note that possible problems greatly depend on your chosen organization that makes payments on your behalf.
