Good morning May,
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