Quote:
Originally Posted by Ry4nVan
Whatever amount you pay over the monthly payment, has to go directly into your principle. Let me repeat, the extra amount you pay a month, will NOT, and should NOT go into interest.
My advice, if you want to pay over, is to take your monthly payment- divide that into 12 and add whatever that amount is on top of your monthly payment.
Hence:
$400/mo Divide by 12 = $33.33
Now add $33.33 to your normal $400/mo payment to equal = $433.33
Most banks will give you an option annually to skip a month out of the year since you are ahead, and it will also help your credit score!
If your extra amount is being taxed with interest, then be sure to call your bank and slap them in the face for stealing your money! (Not like they aren't already anyways)  |
Make sure of this in writing somewhere. I know on home loans, that the mortgage company is not required to apply it to principle unless the payee specifies it. Just adding additional funds to your payment doesnt guarentee it.
I actually just talked to a lawyer today about this (no joke), and he told me some 'horror' stories. He said they
could consider your extra monies as just advance payments on the loan, and not put it toward the principle. He advised to make a seperate payment for principal only. Anyway, doesn't hurt to get clarification from your lender.