For those who try to prepay their mortgages, here's a cautionary tale from reader RM. Basically every single time that he's prepaid his mortgage, there's been a big problem. The bank keeps applying it to the future interest instead of the existing principal. The future interest is calculated based on the current principal, so that means they're having him paying extra interest that would have never accrued if they had subtracted his payment correctly!
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I thought that was the law, anything over the monthly payment is to applied to the principal amount of the loan?
ReplyDeleteThen again, it probably is the law and Chase was trying to pull a fast one hoping noone would notice. I think I would report them if they continue to do that.
Matter of fact, he should report them anyway. Who knows how many people they have done this to and gotten away with it.
We had a similar problem with our mortgage. I was sending extra and they were applying it to our escrow instead of the principal. Now I make sure they know where it should be going.
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