Extra Principal as Future Interest

If You Paid Extra Principal With Your Mortgage Please Read This

My goal is to pay off my home loan as quickly as possible because I get no benefit as I take the 1040 standard deduction.

To accomplish this, I send as much as I can every month as extra principal with my mortgage payment in order to lower my loan balance. U.S. Bank Home Mortgage arbitrarily allocates the extra principal to future interest paid in advance instead of lowering my principal balance – this is fraud!

Last month I called the bank and they credited the amount back to principal. I do not see a need to call the bank every month to avoid being robbed. If they do this to me, obviously they are doing the same to other borrowers - Imagine how many innocent victims do not know that they are being robbed of their hard earned money!

For September 2015, I paid $4000 total, which included $2,672.71 as additional principal. Only $613.97 went to principal reduction. They paid themselves future interest of $357.57 for October 2015.

For October 2015, I paid $4,160.46, which included $2,800 as additional principal. Only $623.90 went to principal reduction. They paid themselves future interest of $347.61 for November 2015.

The fact that this scenario repeats month-after-month is a clear indication that this is not an oversight, but a scheme to rob unsuspected borrowers who believe that their extra principal payments are used to lower their loan balance – no! U.S. Bank allocates that extra principal to un-earned future interest paid in advance….What a rip-off!