Pocketmint

small change toward a rich life
8
June
2009

Put that money where it belongs, dammit

Here’s yet another reason why checking online account information regularly is a good idea:

My regular monthly electronic payment on our second mortgage went out to Bank of America on June 3. On June 4 I manually sent an extra $2000 against the principal.

On June 7 I checked our mortgage accounts online. Turns out that they split the $2000 and used part to make July’s payment a whole month early, leaving only about $1240 toward principal.

Grrrr. Sneaky bastards.

I was able to call this morning and get this corrected with minimal hassle. However, if I hadn’t checked the allocations, they would have just applied July’s payment against August, and so on, and we’d never have gotten the interest reduction from prepayment.

That $750 paid against principal today saves us over $6100 in interest over the life of the loan (2.5 years into a 30-year amortization). Of course the bank would rather have that $6K in interest and a month’s cushion against late payment, but I’m not going to give it to them.

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4 responses

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  1. GreyDuck says

    This, to me, is one of those “can they DO that?” moments… the answer, of course, is “yes they can, if you let them.”

    Money is scary, I keep tellin’ ya. *grin*

  2. karawynn says

    Very true. Not as scary as the lack of money, though … /wry

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