I recently asked for a payoff on my home loan. On the very bottom of the payoff statement is a paragraph telling me that from now on they require an additional $60 a month interest until the loan is paid in full. $60 dollars is the amount of my current monthly payment that goes to interest.
I do not understand what this means. I have sent them a letter asking them if they are going to raise my current payment $60. If so how will that work; will I end up paying them additional interest on my loan?
This would mean that out of each mthly. Payment I send, one principal payment will be made and two interest payments. Is that right? If so wouldnt you end up paying twice as much interest, or more, for the remainder of your loan?
As you can see by my questions I am not familiar with how home loans are set up. I have been paying on this loan for over 25 years. My house payment has increased as the amount needed in escrow has gone up. You never know how much the escrow amount will go up due to my property tax and home owners insurance rates go up. But up until now the interest and principal amounts have always changed on the schedule they were suppose to.
I am confused as usual. I wonder why they decided to increase the interest? I wonder if asking for the payoff had anything to do with it? I would think a seperate letter notifying me and giving a little more information would have been more appropriate than a small paragraph at the bottom of the payoff statement.
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