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MortgageQ

@verizon.net

Mortgage Question

Hi,
I bought a house that was owner financed. I've got a few other properties and make my mortgage payment each month on time to all of them. All of the big banks take my payments and credits me the same amount each month for a set period of time for the loan amount and interest.

The owner financed property takes different amounts out of my payment each month towards the principal of the loan. For example, my payment is $549 a month. Some months, $0 is applied to principal, another month, $171 went to principal, another month $236 and so on.. No set pattern. I asked them why this is and they keep telling me that, "you're late, but not late.." With all the other loans I have, even if you're late, you pay a late fee and your payments then are applied normally.

Are these people with the owner financed property trying to pull a fast one? Last year, 4 of my payments went totally towards interest and not principal.


Msradell
P.E.
Premium
join:2008-12-25
Louisville, KY
It sounds like they're definitely screwing you! Best man for a complete accounting of all your payments and check the original documents to be sure they are crediting things correctly. Sounds like your best bet may be to mortgage this property through a bank instead of them. I don't see how what they're doing could be legal or moral.


jjoshua
Premium
join:2001-06-01
Scotch Plains, NJ
kudos:3
reply to MortgageQ
It sounds like you should have agreed on an amortization schedule.

The longer this goes on, the more you will be ripped off.


s bassaw

join:2006-06-11
New Rochelle, NY
reply to MortgageQ
OP, get an amortization schedule from:
»www.bankrate.com/calculators/mor···tor.aspx

Then check your finance company for a copy of what's owed on the loan to date and see if it all adds up. Maybe it's just odd accounting?


hitachi369
Embrace Your Rights
Premium
join:2001-10-03
Grand Rapids, MI
kudos:4
reply to MortgageQ
You could have a DSI (daily simple interest) loan, which would cause the amount of interest and principle payments to change based on the number of days in the month and when your payments are received. I would suggest going over your loan paperwork to see what your financing terms were.


KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

1 edit
reply to MortgageQ
That's completely bogus.

The payment, unless you specifically overpay, should be exactly the same to principal and interest EVERY month.

First check your loan documents.... and I'd start documenting everything they say, and I'd send letters to communicate.

If they are defrauding you, you well may end up in court suing them, and you'd need the proof.

Sounds fishy to me.
--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini


icp1
Premium
join:2000-10-13
Saint Louis, MO
said by KrK:

That's completely bogus.

The payment, unless you specifically overpay, should be exactly the same to principal and interest EVERY month.
...
How do you figure this? Amortization schedules are almost entirely higher on interest at the beginning and slowly declining interest/increasing principal over time ?


Kilroy
Premium,MVM
join:2002-11-21
Saint Paul, MN

1 recommendation

reply to MortgageQ
Part of this matters when you make your payments. For instance if your payment is due on the first and one month you pay on the 15th and then wait 45 days to make a payment all of that money will go to interest. If you continually make the payment 30 days apart more will be going towards the principal over time.
--
When will the people realize that with DRM they aren't purchasing anything?


KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
reply to icp1
Yeah, I mis-stated what I mean. The amount of principal paid should start at a certain amount and slowly increase (very slowly) with each payment. Escrow should be fixed unless an adjustment is done.

What should not happen is that $274 go to principal and then the next month only $131 goes to principal. It should not be varying like that.

What I meant to say as you have stated is that the payments should follow a fixed amortization schedule and not vary from it.
--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini

dingo4
Premium
join:2009-02-08
kudos:1
reply to MortgageQ
The principal should sloooowly go up, and the intersest should slooowly go down if you make your payments on time. I think you're getting screwed.
--
When a leaf falls in the forest, the eagle will see the leaf fall, a deer will hear the
leaf fall, but a bear will smell the leaf fall


freecity

join:2002-08-27
Markham, ON
reply to MortgageQ
Perhaps you have a variable rate mortgage. Call your lender or check the loan agreement for more details.


61999674
Gotta Do What Ya Gotta Do
Premium
join:2000-09-02
Here
kudos:1
It isn't going to vary that much.


Hayward
K A R - 1 2 0 C
Premium
join:2000-07-13
Key West, FL
kudos:1

3 edits
reply to MortgageQ
assuning they are accounting properly you should be glad that large amounts are going to principle and not just interest.

It could be for tax reasons... interest is income to them principle is not.

If anything again the accounting is proper you should be paid off earlier than expected and less interest paid. I would keep detailed records though particularly of things receipted as principal.
--
»haywardm.com (Hayward's Key West)


Waldothe3rd
Premium
join:2009-02-16
Sun N Sand
reply to MortgageQ
A question that has not been asked of the OP is: What day of the month do you make your payment? If it is DUE on the 1st, does the owner have the money IN HIS HAND on the 1st? He may have every right as the mortgagor to charge interest for those days considering the payment is in reality PAST DUE. A person carrying your paper is not a big-bank where if the payment gets there on the 16th, it does not accrue charges. Bottom line, pay your mortgage on time!


Kilroy
Premium,MVM
join:2002-11-21
Saint Paul, MN
It sounds like the OP makes the payments before the due date, but if the payment dates are not consistent you could have the problem that he describes.

Let say I pay my mortgage payment every four weeks when I get paid, and assuming I get paid every two weeks. After a period of time I will be further and further ahead on my payment since I'm paying every 28 days and the payment is due every 30 or 31. So, after four months I'm paying a week earlier, after eight months I'm two weeks before my due date, and so on. This is how people make an extra payment in a year. So, after eight months I'm short money that pay, and can afford to wait until my next pay in two weeks. If I wait I will accrue another two weeks of interest this can eat all of my normal payment and still leave interest to be paid left over to come out of the next payment I make. This is especially a problem early on in the life of a mortgage, when most of the payment goes to interest. So, never being late you can accrue more interest than your normal payment amount.
--
When will the people realize that with DRM they aren't purchasing anything?