On our monthly mortgage bill there is a designated area to indicate if we are paying for principal only (after the initial payment). Do I still need to write a seperate check for a "principle only" payment?
2007-01-17 05:54:48 · 10 answers · asked by angel1183 2 in Business & Finance ➔ Renting & Real Estate
I generally pay extra each month. I have never used a separate check. With insurance and taxes in Florida going up every second, there is also a line to pay additional escrow (if you escrow) so that you do not have an escrow shortage. Make sure you put in how much extra you are paying in that area. I have never had a problem. Also, the next statement always shows me what I did the last statement. It is advisable to check that over as well.
Regards,
Joe...
2007-01-17 06:11:02 · answer #1 · answered by Joe K 3 · 0⤊ 0⤋
1. The lender will cash the check if it is equal to or greater than what you owe for your monthly payment.
2. They will take out the monthly payment.
3. Any surplus will then be applied in one of a few ways.
Best is to indicate what you want to happen. If you want to pay principal early then indicate the amount that should be applied to principal. If you wanted to make the next payment early then there is likely a line to indicate that.
Note that if you do not tell the lender what to do it is pretty much up to them. Some will automatically assume you want to pay principal while others will expect you are paying the next month early. Both are correct unless you tell them what you mean.
2007-01-17 08:29:02 · answer #2 · answered by Anonymous · 0⤊ 0⤋
this is a open question ,so i want to share this infomation with you. when you make your payment ,normally so much interest comes out each month , they have a program at most mortgage companys where you can make bi-weekly payments,when you do the first one -half payment pays the interest and any left goes to the principal ,that means that the 2nd half of your payment is applied directly to your principal. now get ahold of what iam saying,out of your "initial" payment because you split it up ,more money goes to your principal each year,therefore house is paid off sooner. Check with your mortgage company about it ,i was told that mortgage companys do not want to share this info because they lose money,but will upon request.you might have to go thru a manager. but to answer your question :yes i believe you would have to send a payment to principle only seperately.
2007-01-17 06:11:24 · answer #3 · answered by comingonthru 2 · 0⤊ 0⤋
I hope this is a 30 year fix and your are paying a little extra on the principle.
If so great job, First off the so called tax deduction is not that much and decrees each year since you are paying off principle.
Just one extra dollar each month will knock off close to three years, image and paid off house in like 27 1/2 year for just one extra dollar a month.
Get a program and play with the numbers to see what it takes to pay off the house,but more importing think of life with not mortgage, nice cash flow there.
Keep up the good work.
2007-01-17 12:57:43 · answer #4 · answered by Anonymous · 0⤊ 0⤋
No. I do not know why people commonly think this or that they have to write a note instructing their creditor to apply a certain amount to the principle. Because interest is calculated on an annual basis, paying anything extra over the minimum payment automatically goes toward the principle.
2007-01-17 05:59:30 · answer #5 · answered by Joe K 6 · 0⤊ 0⤋
To answer your question: no you do not need to send a seperate check.
A little off topic: There are better places to put your money than paying off your mortgage. Equity pays you 0% interest and only avoids you from paying, on average 6-7%, whereas a good investment account can get 10-12% or more. For more info, please e-mail me (please include "mortgage info" in the title to avoid loss in filtering).
2007-01-17 06:32:55 · answer #6 · answered by Leo N 2 · 0⤊ 0⤋
It depends on your lender but it is a good idea to separate the payments and clearly state on the front of the check if it is for principle only.
2007-01-17 05:58:21 · answer #7 · answered by pknutson_sws 5 · 0⤊ 0⤋
no , you don't need separate check- you just write on the mortgage statement where you want your lender to apply your extra payment and write 1 check for mortgage payment and extra
2007-01-17 16:02:00 · answer #8 · answered by bianca 4 · 0⤊ 0⤋
no.
As long as the total amount of the check equals the total ofthe monthly payment and the extra principle payment.
2007-01-17 06:03:45 · answer #9 · answered by Anonymous · 0⤊ 0⤋
probably not, but you should call the company and ask them to be sure.
2007-01-17 05:57:46 · answer #10 · answered by cadillacrazy 4 · 0⤊ 0⤋