Paying off the principle

nevea2beFebruary 24, 2007

When you make a mortgage payment and wish to apply extra money towards the principle of the loan do you included it with the original payment or go old school and have a hand written check with "pay towards principle" written in the note section?

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steve_o

Writing a separate check may be a PITB, but I think it's the way to go. That way there is no question about what the money is for, and it is easier for you to keep track of that contribution versus the regular mortgage payment.

    Bookmark   February 24, 2007 at 10:52AM
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kudzu9

It's essential to properly and separately identify it. Many lending institutions will otherwise treat it as an early payment, regardless of size, and apply it to both interest and principle.

    Bookmark   February 24, 2007 at 3:48PM
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celticmoon

My mortgage payment slip, chit or what ever it is called, had a space to enter any prepayment on the principle.

Agree it is essential to identify it clearly as toward principle.

    Bookmark   February 24, 2007 at 7:36PM
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nevea2be

Great thanks guys.

    Bookmark   February 26, 2007 at 8:14AM
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