Maybe you have some extra cash to spare and have decided to put it towards your mortgage with the object of reducing your principle.
With the repayment of your mortgage you have decided to pay extra so you can shorten the length of your debt.
There is one problem with this, if you don’t follow-up with your financial institution. They may put that extra money where you do not want it.
- Verify that prepayments go toward the principal and not interest or escrow.
- If an error is made call your bank or financial institution immediately.
- Extra interest accrues if prepayments are not applied correctly.