If I financed a mortgage through a new bank what kind of a bank account did they open for me?

[Texas6023]

Jurisdiction

Texas

Ok. If I it a mortgage through a new bank and I make payments only to pay my mortgage. What kind of a account was opened for me? Checking? I received no paperwork other than about the mortgage. No bank card. No check book. I just have a yellow note card paper with an account number on it that I attach every time I make a payment. Now that is my first complaint.

Second.. Every time I go make a payment they ask if it's towards the loan but that's the only thing I have with this bank so I tell them yes but put it towards the principle. When I get the receipt it just shows the amount I sent whether it was in 50s, 20s, etc... Doesn't specify if it was to escrow,principle or interest. Well seems half the time I have been to make payments they keep putting some towards the interest when I don't ask them to. And they'll put it towards escrow which I have nothing to see that even if I look on my online banking. It's ridiculous and I'm about to blow a fuse. This is the first bank that has been screwing me around when making a mortgage payment. I have been trying to make payment every time I can so sometimes twice a month before a due date so I don't have to pay interest amount and I can put it all towards the principle. I mean the bank would love for me to pay everything but principle but why are the tellers screwing me over like this? Shouldn't I be able to view my escrow balance? Someone please fill me in on what I'm missing here before I act a fool on this bank!!

 

[adjusterjack]

Ok. If I it a mortgage through a new bank and I make payments only to pay my mortgage.

A mortgage account.

Checking?

No.

I received no paperwork other than about the mortgage. No bank card. No check book. I just have a yellow note card paper with an account number on it that I attach every time I make a payment.

There are numerous ways that a mortgage payment can be made. Some banks give you a payment booklet, some banks send you a bill every month, some banks just give you an account number to show on your check.

Every time I go make a payment they ask if it's towards the loan but that's the only thing I have with this bank so I tell them yes

When you walk into the bank they don't know what you are there for until you tell them. Being upset about the question is a bit silly.

I tell them yes but put it towards the principle. When I get the receipt it just shows the amount I sent whether it was in 50s, 20s, etc... Doesn't specify if it was to escrow,principle or interest. Well seems half the time I have been to make payments they keep putting some towards the interest when I don't ask them to. And they'll put it towards escrow which I have nothing to see that even if I look on my online banking.

Here's what you are missing.

When you make a monthly mortgage payment it includes Principle and interest and an escrow amount that includes an estimate for future taxes and insurance.

You do not have a choice because it's done by formula.

Let's try an example.

You took out a $100,000 30 year mortgage on May 1 with a 3 % interest rate. You've already paid for your first year insurance when you bought your policy so the escrow is based on an estimate of next year's policy - let's say $500. You also paid property taxes at close of escrow (check your HUD-1) so the tax escrow is based on an estimate of next year's taxes - let's say $700. That means a total of $1200 for insurance and taxes = $100 per month.

Your first payment is due on June 1. Understand that by June 1 you have already accrued interest on the balance of the loan for the month of May.

Using an amortization calculator I determine that your June 1 payment breaks down as follows:

Principle 171.60
Interest 250.00
Escrow 100.00

Total 521.60

If you decide to make an additional payment on June 15, you have already accrued 15 days interest on the new balance of the loan and the payment will be applied first to interest and then to principle.

Understand that interest accrues on the balance every time you make a payment and not on the amount of the payment.

That's why if you want to pay down your mortgage faster it is better to make the additional payment on the same day as the regular and make it with a separate check marked principle.

You can use the following amortization calculator to print out an amortization schedule that should be pretty accurate based on the amount of your loan on the closing date.

Mortgage/Loan Calculator with Amortization Schedule

Nobody is screwing you over. It's how amortization works on any mortgage loan.

Shouldn't I be able to view my escrow balance?

That's something you'll have to take up with your bank.

I haven't had a mortgage since long before online banking existed so I don't know what's available online these days. I used to get an annual statement about what went in and out of the escrow account or a notice during the year if it had to be adjusted based on a change in the taxes and insurance.

PS: If you are paying your mortgage payments in cash, stop doing that and pay by check, especially if you are paying additional amounts to pay down the principle. Make sure 1 check says regular payment and the other says payment to principle. Get separate receipts for each check and I strongly suggest that you make photocopies of the checks at home before you go to the bank. You can do that with a cheap flatbed scanner, digital camera, or camera phone, and keep the copies on your computer forever so you have your own documentation of payment in case the bank ever screws up. Also put the receipts on the computer and use a backup system for your computer records so you don't lose them.

 

[Texas6023]

You think a bank will ever screw up on the amounts I deposit? Isn't the deposit slip enough? The receipt they give me back...

Also if I pay with a check from my other bank can't I jut transfer it another way? How does wire transfer work? Do you get charged for it?

If I have 10,000 in my other bank account can I make a check towards my principle or will someone say hey that's too much money? You can't do that?

 

[army judge]

You think a bank will ever screw up on the amounts I deposit? Isn't the deposit slip enough? The receipt they give me back...

Also if I pay with a check from my other bank can't I jut transfer it another way? How does wire transfer work? Do you get charged for it?

If I have 10,000 in my other bank account can I make a check towards my principle or will someone say hey that's too much money? You can't do that?

A mortgage, no matter what anyone tells you, is just another way to scam money out of you.

If credit is to be avoided, why is a mortgage to be obtained?

Credit is credit, no matter what THEY call it.

Credit is never a good deal for you.

They'll screw you, no matter how hard you try to avoid it, unless you pay it off. Even then, you reduce the screwing, eliminating it only after you obtain the deed/title.

That's precisely why I owe no one, for anything, longer than 15 days!!!

You're smart to pay ahead, even trebling your monthly payments.

However, they'll find a clever way to screw you, as long as they hold your note.

 

[adjusterjack]

You think a bank will ever screw up on the amounts I deposit?

Oh, yes. That's why you keep your own careful records. I had three rentals and a primary residence. Mortgages on all of them. Lenders changed every few years as the loans got sold. It was almost like a full time job keeping up with all the mistakes the banks made.

Isn't the deposit slip enough? The receipt they give me back...

No. You absolutely have to keep careful records of your own.

Also if I pay with a check from my other bank can't I jut transfer it another way? How does wire transfer work? Do you get charged for it?

Yes. You get charged for a wire transfer.

There are other ways to pay but I won't go into them because they are electronic and you give up control over how you pay every month. Trust me, paying by check personally every month and keeping copies and getting receipts is the SAFEST way for you to do. There isn't enough space on this website for me to write all the horror stories that people have posted on the other sites that I'm on.

If I have 10,000 in my other bank account can I make a check towards my principle or will someone say hey that's too much money? You can't do that?

We covered that in another post. Anybody who says that to you is a moron who can be safely ignored.

I, and Army Judge, who have no mortgages, wholeheartedly support your desire to pay off your mortgage as fast as possible. I covered that in another post, too.

If you want to pay $10,000 toward your principle make sure you mark a separate check "payment to principle" and tender it the same day as you make your regular payment.

 

[adjusterjack]

If credit is to be avoided, why is a mortgage to be obtained?

Credit is credit, no matter what THEY call it.

Credit is never a good deal for you.

That's right.

You and I eschew credit for good reason. But let's face it. People in their 20s and 30s and 40s rarely have the tens of thousands to buy a car for cash or the hundreds of thousands to buy a house for cash.

Took me till I was in my 50s before I could do it and I'll wager that you had a mortgage or two in your early days, Army Judge.

I use credit cards frequently when I buy online and/or want the extra year warranty that the credit cards give (really works, too, I've used it) and pay the bill as soon as get it. I get 1% cash back and never pay interest or fees. No credit card company has made a nickel off me for the last 35 years. In fact, I had one card company cancel me because they didn't make any money off me.

Here's something that'll make you laugh, Army Judge. I have a Discover card only because their website shows me my FICO credit score every month for free.

My score is 807 and the site tells me I can have an even better score if I had a loan because (get this) "having a loan along with other types of credit demonstrates that you are able to manage a variety of credit types. Financing a purchase with an installment loan and consistently paying on time is a good way to demonstrate one's ability to manage a variety of credit types."

Giggle.

 

[army judge]

That's right.

You and I eschew credit for good reason. But let's face it. People in their 20s and 30s and 40s rarely have the tens of thousands to buy a car for cash or the hundreds of thousands to buy a house for cash.

Took me till I was in my 50s before I could do it and I'll wager that you had a mortgage or two in your early days, Army Judge.

I use credit cards frequently when I buy online and/or want the extra year warranty that the credit cards give (really works, too, I've used it) and pay the bill as soon as get it. I get 1% cash back and never pay interest or fees. No credit card company has made a nickel off me for the last 35 years. In fact, I had one card company cancel me because they didn't make any money off me.

Here's something that'll make you laugh, Army Judge. I have a Discover card only because their website shows me my FICO credit score every month for free.

My score is 807 and the site tells me I can have an even better score if I had a loan because (get this) "having a loan along with other types of credit demonstrates that you are able to manage a variety of credit types. Financing a purchase with an installment loan and consistently paying on time is a good way to demonstrate one's ability to manage a variety of credit types."

Giggle.

In my early years, I resided on military bases.
The on base housing eliminated mortgages.
I have never bought a car on time.
My first car was a 1965 Triumph Spitfire.
I bought it in 1966.
I had been in the army about a year, and was headed to 'Nam.
I stored the car with mom and dad.
It cost $1,200, with taxes, other fees, it was $1,350!
I saved $1,000, dad gave me the other $350 as a gift.
I gave it back to him a month later.
I was taught by my smart, thrifty, frugal parents to avoid credit.
They taught me credit was a trap.

We bought our first home after I retired, having saved the money to buy it in cash over my 30 year military career.

I teach others to avoid the many credit traps.
My FICO scores vary from 801 to 815.
Those made up numbers alone scream scam, which is why I wouldn't care if those scammers rated me at 400!
I have a MasterCard for the reason you have your Discover.
We use those crap cards when we travel, because some hotels eschew cash, and car rental companies make the use of cash onerous.
Plus, buying an airline ticket with cash says to the dummies who couldn't prevent "911", I'm a terrorist.
I never use credit cards when we're at home.
Dad would always say, if you can't afford it, don't buy it.

 

[Texas6023]

Ok. I agree with you guys for the most part. But. Isn't it the American way to use credit cards and have loans? I mean what else would we talk about if we didn't have debt? I mean even the United States is in the biggest debt deficit so you must be up to something if you don't have debt?

I'm a firm believer of if you don't have it then don't buy it. But I do have a wife and her mom has a notebook of approximately 50 credit cards. I thought it was a joke when I seen it but it was not. So coming from my parents that didn't have not even one credit card I was in Awww when I seen all the credit cards my in laws have. And my wife thinks it's ok to have credit cards and pay interest. When me and the wife first had our own home and own bills she was in charge of paying bills for a whopping 2 months because she was ok with late fees and pay 25% interest on credit cards. I flipped out and 12 years later I'm still in charge of all the bills and pay everything every month. Only interest I have is on my mortgage and I don't like it.. I can't sleep at night knowing this interest is tacking on.

But one thing I have been told is you can't go in and pay cash for a vehicle that is multiple thousands or it will be questioned as drug money.

 

[adjusterjack]

Isn't it the American way to use credit cards and have loans?

The financial industry would certainly have you believe that.

what else would we talk about if we didn't have debt?

My friends and I often talk about not having debt.

I mean even the United States is in the biggest debt deficit so you must be up to something if you don't have debt?

Yes, those of us who have no debt are certainly up to something nefarious: financial security. The huddled masses yearning to be debt free look upon us with suspicion and fear.

But I do have a wife and her mom has a notebook of approximately 50 credit cards.

I've read about that in the psych books. It's a mental health disorder called Obsessive Compulsive Disorder (OCD). In other words, your mother-in-law is nuts.

And my wife thinks it's ok to have credit cards and pay interest.

So did my ex-wife (notice the "ex" in there). I had to put limits on her spending and keep control of the family finances.

But one thing I have been told is you can't go in and pay cash for a vehicle that is multiple thousands or it will be questioned as drug money.

Maybe, if you are using a briefcase or a paper bag full of cash, but who cares what some moron thinks.

 

[txls]

Most people buy a house with a mortgage. You can pay additional principal as long as the interest and escrow payments are current. I don't know where you people bank at, but I've never been screwed over by a bank. Credit cards are very convenient and don't present an issue for someone who uses them responsibly. If you pay cash over $10,000 for anything, it has to be reported to the IRS. As long as it isn't drug money(or any other illegal gains) then there's no worry.

 

[army judge]

The great thing about the USA is, although some are fighting to change it, one is still FREE to do things the way he or she chooses to as long as she or he obeys ALL of their laws!!!!

I criticize no one.

I simply choose to do what I believe best serves me.