I am trying to pay extra to the principal every month.
All amount below are approximate...
Let say my payment of P & I is $400.00 for this month.
I pay $1,000.00 — expecting the extra $600 to be applied to the principal.
Well Fargo mortgage system processes the payment in the following way:
first $400 ($330 interest $70 principal) for this month
next $400 ($328 interest $72 principal) for next month
and $200 to the principal.
Why would I want to pay them interest that has not accrued yet?
Is this even leagal to charge interest before it accrued?
Let say I have a 15 year loan and I decide to pay the loan off... Are they going to charge the interest for the remainder fo the loan first and then apply to the principal???
Of course when I complain — someone fixes the problem by applying pament correctly. Why should I even be contacting them about this problem???
I have other mortgage payments that I prepay — and I have no problems.
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