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Home > No, I can't prepay my mortgage biweekly

No, I can't prepay my mortgage biweekly

June 22nd, 2006 at 06:00 pm

I have learned, after two attempts at partial payments, the last which had written instructions to apply toward interest and escrow but was applied toward principal and escrow, that my bank treats all partial payments as principal-only.

The bank COULD have returned my check with the written instructions with a "sorry, we can't do this. Do you want us to apply it toward principal?" But it didn't.

Here's what I now know from

Text is Biweekly Mortgage Payments and Link is http://mortgage-x.com/library/biweekly.asp
Biweekly Mortgage Payments:
'Do it Yourself' Biweekly

If your lender does not offer a biweekly program and you are interested in paying it off early, you can open a bank account, arrange for it to make your monthly mortgage payment every month and pay half the monthly payment into the account every two weeks. At the end of each year, write a check on this account for an amount equal to your monthly payment and send it to the lender.

There is another simple method for prepaying a mortgage loan. Add an amount equal to 1/12 the monthly mortgage payment to each monthly payment and you will pay off the loan a little earlier than if you take out a standard biweekly.

I'm incensed, mostly at myself of course, because this is the loan that has the lowest interest rate. I could have prepaid my scooter, or put $$ toward the credit cards. Instead I get an earlier mortgage payoff date.

The bank takes no responsibility for misapplying my funds.

I'm already really stretched with the life insurance payment, the bed, the testing/evaluation fees for the tot, the deposit with the application for the child's prospective new daycare, motorcycle maintenance, the GameBoy my husband bought for himself for Father's Day.

My options, none of them really palatable:
a) suck it up and make a full payment before July 15.
b) use the 3.99% convenience checks from Bank of America
c) use the 0% convenience check from MBNA, whom I've stopped using out of spite, and get charged $75.

Things I did right:
* Met with a mom of a similarly challenged boy
* mailed a completed application form for the cheaper daycare
* mailed a completed application for cheaper long-distance phone service

4 Responses to “No, I can't prepay my mortgage biweekly”

  1. debtfreeme Says:
    1151002575

    I am not sure i understand, why would you want the payment to be applied to the interest? You really want it applied to the principal and the escrow that is how you can prepay, not by paying for the interest.

    Just being curious, why would you want to prepay interest?

  2. PauletteGoddard Says:
    1151004221

    I had this idea in my head I could pay half of the full monthly mortgage payment every two weeks. As long as the bank received the full monthly payment on time, I figured it didn't matter how I divided up the payments or staggered them.

  3. veronak Says:
    1151004484

    Can you just set the payment aside bi-weekly and send in at once?

  4. marjorie Says:
    1151010556

    My bank "offered" to change my loan to what you wanted for a mere $350! They said payments would be applied as your's were otherwise.

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