Posted on: 27th May, 2010 05:52 pm
i have an interest only second mortgage.
as of february, 2010 the loan balance was $51,600 (rounding to keep the exact numbers private). the next payment was not due until 7/2011 because i had made extra payments in the past, which had pre-paid some of the interest.
i made a request for all future extra payments to apply towards principal, rather than pre-paying more interest. in march, they apparently set this up and also "re-allocated" my past payments. this made it so my march statement said my next payment was due in april 2010, so my pre-paid interest was out the window. this would all be fine and dandy, except i would have expected my principal to go down by quite a bit- i'd estimate somewhere around $5000, since i'm paying about $300 a month towards interest. my principal only went down to $51,500, because my last payment took it down by that much.
shouldn't the re-allocation have substantially reduced my principal? otherwise, what did i gain by losing a year and a half of prepaid interest?
this loan was transferred to the current company about a year ago, and most of the extra payments were made with the old company, so i am wondering if that is part of the problem.
thank you for your help.
as of february, 2010 the loan balance was $51,600 (rounding to keep the exact numbers private). the next payment was not due until 7/2011 because i had made extra payments in the past, which had pre-paid some of the interest.
i made a request for all future extra payments to apply towards principal, rather than pre-paying more interest. in march, they apparently set this up and also "re-allocated" my past payments. this made it so my march statement said my next payment was due in april 2010, so my pre-paid interest was out the window. this would all be fine and dandy, except i would have expected my principal to go down by quite a bit- i'd estimate somewhere around $5000, since i'm paying about $300 a month towards interest. my principal only went down to $51,500, because my last payment took it down by that much.
shouldn't the re-allocation have substantially reduced my principal? otherwise, what did i gain by losing a year and a half of prepaid interest?
this loan was transferred to the current company about a year ago, and most of the extra payments were made with the old company, so i am wondering if that is part of the problem.
thank you for your help.
Hi danporter!
Welcome to forums!
As you've made payments towards the principle it is obvious that your principle balance would go down. As the loan has been transferred to a new company, I would suggest you to contact your new lender and check out the details with him. He will help you know why your principle amount did not reduce substantially.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
As you've made payments towards the principle it is obvious that your principle balance would go down. As the loan has been transferred to a new company, I would suggest you to contact your new lender and check out the details with him. He will help you know why your principle amount did not reduce substantially.
Feel free to ask if you've further queries.
Sussane