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Old 05-26-2013, 04:04 PM
 
Location: TX
795 posts, read 1,188,376 times
Reputation: 782

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Quote:
Originally Posted by machinebike View Post
Celsius, yes, it would help me understand better what capital you are referring because I don't see a specific meaning on the mortgage docs.
Whatever money you are given upfront to purchase the property...
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Old 05-30-2014, 10:06 AM
 
1 posts, read 1,071 times
Reputation: 10
We took out a three year Home Equity Line of credit loan. It is paid by automatic monthly draft on the 5th.of each month. We were told we could make any additional (principle only)payments that we wished as long as we didn't pay off the balance before three years, if we paid it off before then we had to re-pay the bank $360 for the Home Appraisal fee. All was well for almost a year, we would make an additional (Principal Only) payment whenever we had extra funds. The payments were made in person at the bank and 100% applied.
Then the bank moved our loan to a different department or Branch Office. we went in to our office and made an additional payment on the 10th. but this time they charged $29.00 interest. on that "Principal only payment" our next regular payment wasn't due for another 3 weeks!
I don't think this is acceptable, since I never agreed to these new "terms". My loan officer told me that I now have to make any additional payments on the same Day they, Draft the regular payment and I wouldn't be charged the extra interest.
The Loan disclosure I received from the new office has the same (early payment ) options in writing as the original agreement. But they still charged me the interest. I have now gotten it credited to my principal after I lodged a complaint.
FYI:
Beware and make sure you read all documents the lender sends, to avoid this!!!
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Old 05-30-2014, 02:07 PM
 
Location: Whereever we have our RV parked
8,105 posts, read 7,112,545 times
Reputation: 13611
Op I've seen this before on my own car payments. Car payments are not like mortgage payments. With car payments, they are charging you interest daily. So the gap between your last payment and the $500 you acrued interest. They took some of your payment for interest. I would doubt that there is something illegal about it. A mortgage is a bad deal to a certain degree for the lender. The homeowner can pay it up to the day before the end of the grace period and there's no penalty. But a car loan isn't like that. The interest just accrues every day.

What you're doing is wise. You're paying off your loan as soon as you can. It will save you a ton of money.
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Old 05-30-2014, 04:10 PM
 
17,673 posts, read 12,309,024 times
Reputation: 12918
Quote:
Originally Posted by augiedogie View Post
Op I've seen this before on my own car payments. Car payments are not like mortgage payments. With car payments, they are charging you interest daily. So the gap between your last payment and the $500 you acrued interest. They took some of your payment for interest. I would doubt that there is something illegal about it. A mortgage is a bad deal to a certain degree for the lender. The homeowner can pay it up to the day before the end of the grace period and there's no penalty. But a car loan isn't like that. The interest just accrues every day.

What you're doing is wise. You're paying off your loan as soon as you can. It will save you a ton of money.
On a mortgage you certainly being charged interest daily. Pay your house off on the first and it certainly will be a different amount than the 2nd or 30th
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Old 05-31-2014, 07:09 AM
 
2,429 posts, read 3,069,064 times
Reputation: 3328
gregm, are you saying you can never "own" anything if you're forced to pay taxes on it?

Is that what you mean by
Quote:
Actually he bought the house for the County, the bank financed it. He pays interest to the bank, the county always owns it forever. And then he pays property tax to the County, on top of the interest, and so called principal. That's why home ownership is such a rip off. You pay, and pay, and never "own" it.
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Old 05-31-2014, 09:06 AM
 
152 posts, read 171,783 times
Reputation: 74
Bank of America has two check offs for payment. You can make additional payments by specifying apply to principal only.
It doesn't change the requirement to pay the interest every month.
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Old 05-31-2014, 09:13 AM
 
11,791 posts, read 16,546,162 times
Reputation: 16637
You have to specify very clearly that it is a principal payment otherwise it will be applied to interest and principal.
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Old 06-20-2014, 03:02 PM
 
Location: Ontario, NY
2,595 posts, read 5,912,395 times
Reputation: 2496
Quote:
Originally Posted by ShakyJ View Post
I recently purchased a new car and am making monthly payments if $275/mo to my bank. For the past few months I have always added an extra few $$. $ 25, $50, etc. Then about a week after my 4th payment, I made a payment ( all have been online) for $500 toward the principal.

When I checked my loan balance, I noticed that my balance did not drop by $500, but by $457. They kept $43 and applied it toward interest. Keep in mind I just had made a payment, all payments have been on time and my account said nothing was due. To me this should have taken $500 off the principal.
If you paid $500 toward principal the same time you made your regular payment, then yes the entire $500 would be deducted from principal. But you waited a week to send them the $500. So that's 7 days of interest that's taken off the top from the $500. Now when you pay your next regular payment, next month, they should only charge you for 23 days of interest, because you already paid 7 days worth of interest. Thus a larger portion of your regular payment get credited towards principal.
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Old 06-24-2014, 04:40 PM
 
48,519 posts, read 81,270,198 times
Reputation: 17979
It depends on the contract as to type of loan .Some only allow early payments of equal amount and only means early payoff.
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