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Rakin - I have WF too. Do you have it set up for auto withdrawal from your bank account? I have them take out funds twice a month and extra comes out each withdrawal that is applied towards principal. It works great for us!
I do mine that way too, but just once a month, didn't realize you could do twice a month withdrawals. Last time I asked about it at the bank, they told me the system wasn't set up for that. I'll have to look further.
Not true. There are other ways it could be applied, such as to your escrow account, outstanding late charges, etc.
Oh. We do not escrow and we have never owed a late fee.
Quote:
Originally Posted by Lacerta
I do mine that way too, but just once a month, didn't realize you could do twice a month withdrawals. Last time I asked about it at the bank, they told me the system wasn't set up for that. I'll have to look further.
For the biweekly programs you usually have to pay an upfront fee.
That's why CW asked me to specify explicitly the check is for additional principal payment. This potentially causes a problem for online billpay, where you can't send a memo with the check.
Here's a troubling news.
On 8/13/2009, I made an online billpay from chase checking to CW. I was hoping it will be applied to principal as the next monthly payment is not due till 9/1/2009.
Guess what? They applied my online billpay first to September monthly payment and the rest to extra principal payment. (As I said in my previous post, when I schedule online billpay, I cannot send a memo with it.) I had to make a call to CW to make all the payment towards additional principal payment.
This is annoying because my CW is already set up for automatic monthly payment and the system can't determine my extra payment was for additional principal payment. I wonder what happens to my scheduled September payment, if I don't make a call to CW. The system may consider it as the second September payment.
So here's the bottom line. If you make online billpay to CW right after (less than 10 days) your monthly payment, it will be probably considered as extra principal payment. On the other hand, if you send the payment after this window, CW will consider your payment as the next monthly payment even though it's not due for another 2-3 weeks. The good news is a simple call will correct this.
So here's the bottom line. If you make online billpay to CW right after (less than 10 days) your monthly payment, it will be probably considered as extra principal payment. On the other hand, if you send the payment after this window, CW will consider your payment as the next monthly payment even though it's not due for another 2-3 weeks. The good news is a simple call will correct this.
I stand corrected.
After making my regular September payment on 9/1/2009, I made online payment of the amount of $4k on 9/2/2009. Unfortunately, this 9/2/2009 payment was applied as October mortgage payment, even though that's 30 days away. I need to call CW to apply it as additional principal payment. Annoying.
So it seems that no matter when, if the online payment is larger than the monthly mortgage payment, it will first be applied to the next monthly payment, then the rest will be applied to the additional principal payment.
Again, when you send a payment this way, through your bank, a person [who is in the middle of processing hundreds of payments] has to make a decision about what to do with the funds. The default decision made will generally be the next monthly payment, as acegolfer is finding. There just is not enough time to stop and look at each person's account & payment history and be "logical" about what they are trying to do. I don't think this is a reasonable expectation.
Those making extra principal payments are best off sending in a check with the memo line marked "principal reduction" or using the mortgage company's own website (if applicable) to make the online payment, NOT your bank's website.
Sending an actual check with "principal reduction" is the safest way to guarantee that it will be applied to principal only. But I don't like to spend money on stamps and lose interest on couple of days. That's why I want to use online billpay to make additional payments.
I did another experiment today. I made 2 online payments $800 and $1200 both less than my monthly payment. Both were correctly applied to principal.
From my experiment with Countrywide, I guess as long as the online payment is less than the monthly payment, it will be applied towards additional principal payment. See whether it works for you. If it doesn't, you can simply call and make adjustments.
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