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Made A Mistake

July 4th, 2013 at 09:08 am

I logged on to our bank account today to find those pesky Capital One 360 test deposits. They were there. A whopping $0.27. I will add to my snowflakes for this month. (And, no, I still can't refer a friend. Ugh.)Something wasn't right however...the balance was...well significantly lower.

We have only had about six transactions since payday. They were all there. It took me awhile to figure out that I made an extra mortgage payment! The August payment to be exact. Apparently, I did this when I made that extra $56 principal payment on Monday. I thought this was just the regularly schedule payment I was seeing, but no that definitely not what I was seeing.

Our regular P&I payment is $973.66. The second payment this month had $437.99 go to principal and $535.67 to interest. I'm guessing interest will accrue until September though, thus making our payment in September have more interest taken out right? That isn't good. Or I guess we prepaid that interest now, so the next payment due in September would just be divided normally? I'm confusing myself!!

Luckily, there is plenty of cash in the checking account to cover it. I just need to keep track of that until August. And pay that money back with the August payday. I also need to go in and cancel our regular payment for August because right now Wells Fargo has it scheduled to withdraw.

I will definitely call tomorrow to see if they can back the payment out or change it to full principal payment. I'm open to thoughts and ideas on this. I have never make this mistake in all the years we have had mortgages. Apparently there is a first time for everything!

Happy Independence Day!

6 Responses to “Made A Mistake”

  1. MonkeyMama Says:

    Aw, bummer, but it happens! We are only human. Big Grin
    Actually, no, you will not pay more interest in the meantime. You did prepay one month of interest, which is a bummer. BUT, they will not charge you more interest next time.

    A tip for everyone: The mortgage interest you pay any given month is mortgage balance x interest rate, divided by 12 (months).

    Of course, it depends what kind of mortgage you have, but the vast majority of U.S. mortgages work like this. I always calculate my interest every month, and then make sure the bank has the same figures.

  2. scfr Says:

    Glad to hear that you are human like the rest of us. On the 27 cents in test deposits, they may take them back ...

    Happy Independence Day.

  3. creditcardfree Says:

    @MM, thanks for clarifying that I won't pay more interest. As I thought about it more, I didn't think that would be the case. Thank goodness!

    @scfr, I've never had test deposits taken back...have you? It's fine if they do. It's for their assurances anyway.

  4. scfr Says:

    Yes, I've had them taken back, a couple times.

  5. Kristina Says:

    I am confused. If you made an extra payment to your mortgage why wouldn't the whole extra payment go toward principal? And shouldn't your August payment then reflect a slight difference in the interest that would be paid because of the extra payment?

    I am trying to figure out the mortgage things and thought that if I made an extra payment it would all go to principle thus lowering the amount of interest charged in August.Is that wrong?

  6. creditcardfree Says:

    @Kristina, sorry for the confusion. It is very important to specify to the mortgage company how you want your payment applied. The $56 I made as a principal payment was applied towards principal.

    Unfortunately, I made an error when I was online and authorized a full mortgage payment (interest and principal). There were three boxes, one for a regular payment, one for principal and one for escrow. The regular payment was prefilled in. I assumed the payment I was authorizing was the same payment they were already authorized to take out automatically each month. What I really did was authorize an additional full payment which they have counted as the August payment. That payment did have less interest applied just like you would expect.

    The really important thing if you are making extra principal payments on a mortgage is to specify you want the money to be applied to the principal. Your understanding of how extra payments work is correct.

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