Skipping A Payment After Refinance?

Avery just refinanced his home from a 30-year to a 15-year fixed mortgage. The first payment isn't due until June. Should he make the May payment or apply it to his debt snowball instead?

QUESTION: Avery in Indiana just refinanced his home from a 30-year to a 15-year fixed mortgage. The first payment won’t be due until June. Should he go ahead and make the May payment or apply it to his debt snowball instead? Dave would put it on the debt snowball.

ANSWER: I would apply it to my debt snowball. There isn’t a May payment on your home. If you paid a payment, it would just be prepaying some principal. Mortgage interest is charged in arrears, which means backwards. Your June 1st payment pays your May interest. That’s why you don’t have a payment until June 1st. If you made a May payment, it would just be an extra principal payment.

The core of your question is do I pay extra on my mortgage instead of paying on my debt snowball? The answer would always be no. You work your debt snowball first and get rid of your consumer debt, and then we move on up the Baby Steps.