I know pay in two checks, one marked interest only and the other marked principal.
It is a great way to shorten the term on your mortgage. I went from 30 years down to 19.
Keep it up, but definitely keep an eye on what they are doing with the money. If you have online access to the payments, look each month to make sure it is going towards your principal.
Senior Loan Officer
Sterling National Bank
I would suggest checking with the mortgage department at your bank first. The other option would be to write seperate checks to be sure.
When I bought my first home I prepaid additional principal to my mortgage for the first 2 years or so. Back then I had a coupon and I could stipulate on the coupon the additional principal I was paying. Still, my Lender at the time couldn't grasp the simple concept of prepaying a mortgage.
I called each month to verify my additional payment had gone to principal only to discover the Lender was putting the extra cash in my escrow account! It took me about five months until I was able to "train" my Lender to correctly apply the additional cash towards principal. I checked every month thereafter and the additional principal was correctly applied.
If you pay your mortgage online, or by mail, or at the bank in person, no matter how you stipulate the additional principal, you must verify your Lender is correctly applying the money to the principal and not elsewhere.
I hope that helps!
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services
Usually when you send in your mortgage payment you can specify on the portion of the statement you return with your check what the monies in your check(s) should to towards. This can also be done online if you pay your mortgage online.
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783