Originally Posted by
jake314
Great question. We have found that each lender processes extra payments differently. For example, Wells Fargo directs payments in excess of the monthly bill to principal by default. Some of the newer mortgage products (neg am, IO, or PITI) that allow flexible payment amounts may be treated differently. The best way is to verify with your specific lender what their default procedure is for excess payment amounts. If your comfortable telling me your lender, you can email me and I'll research this for you.
Jake,
I'll give an example exactly similar to Richard's. When I schedule my mortgage payment each month with Countrywide, If I include extra amounts I have to tell it where to apply them, whether Principal or Escrow. I think what he's getting at is, it would be great if cardit.com was setup so that we could direct where we want extra payments to go, just like we can if we are paying our mortgage directly to the lender. What my lenders default for extra payment is, is not going to help unless it just happens to be what I want it to be. As Richard suggests, the default may often be to hold the amount as credit toward the following month, preventing us from paying the extra principal to pay off the mortgage sooner.