About 2 years ago I purchased a home for $418,000. Ther were two parts to the loan. A interest only option payment and a line of credit for $41,800.00.
There were many occasions where I would make a principle "only" payment (almost always $100.00) with a seperate check and memo on the check saying principle and also stating to the teller that it was a principle payment.
Upon checking my statement the following month I always noticed that the principle amount was never applied. I would call the bank and be on the phone for an hour every month (or whenever I made a principle payment) and then I would get an apology. There was even one time when they said they had to go back and readjust all payments because I was being charged for a principle balance which actually shoud have been less because of previous payments.
I am not sure if that was ever done. The actual banking interest and procedures are very complicated to understand. Recently I made another principle payment and it had not been applied again.
I called the bank and the person I was speaking to told me I had a credit on my"interest only payment" because I overpaid last month. I told him that was a principle payment and he replied saying that I needed to make my payment on time. I replied by telling him that I have made payments before the due date of the 6th of each month, made payments on the 6th of each month and made payments after the 6th of each monthEvery time the principle payment was never applied to the principle amount. I had to call the bank every time and I was getting tired of it. We argued a bit and I was given a supervisor. Who informed me of the following:
This is Unbelievable!!! There is a window between the 6th (payment is due on the 6th) and maybe 9th or 10th of each month, depending when the next statement is issued, where I have to go in a make a seperate principle payment only! That is the way the computers are set up. So I asked her specifically; you mean too tell me that if I go to the bank 1,2, 3 days before payment is due make my payment (like a good client) and make a principle payment, with a seperate check saying principle only on it, that amount will not be applied to my principle? She told me that was correct. I was livid! I did however thank her because no one had ever given me that information in two years. So I have been making principle payments and the loans are so confusing as to what they are actually doing. I informed her I was going to do something that this had to be illegal in some way and she just apologized and ther is nothing I can do.
Well I am trying to do something. Thank You
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