I think not. I just got a letter form them stating that...

"When you are ending in more than your monthly payment, a letter must be sent to advise how that payment should be applied. The letter must be sent in every time that an extra funds are being sent."

So I have about 70 payments left. So thats 70 sheets of paper to write them a letter telling them what to do with the little extra I send. And you have to figure that I'm not the only one sending extra. How environmentally conscious of them. Good spelling too.

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There’s a guy wearing overalls with no shirt.
Which I think we all know is the International uniform for the last guy you’ll ever see.

So if your mortgage payment is $500 and you send in $550, they don't automatically apply that to the principal? That's ridiculous. Why else would you send extra? As a gift?

You should try their online "manage your loans" service - it's more convenient and it eliminates their paper communications.

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Le poète doit vivre beaucoup, vivre dans tous les sens. - Verlaine

You should probably blame the IRS, not Sallie. Sallie Mae cannot be in the business of figuring out if you made a mistake, are repaying your principal, or are making a tax-deductible interest payment a month early, which is a legal strategy to crowd your deductible interest payments into a particular year.

(Sallie Mae = student loans, not mortgage loans. That's Freddie Mac.)

Paper is fully recyclable, and trees are a renewable resource.

BGnR

I have read that you should always indicate that any extra payments should be applied to the principal. I have a friend who found out after maybe six months that his extra $50 a month, or whatever it was, was being applied to the interest -- because he was writing the instruction on the memo line of the check. The mortgage company said they "did not notice it". YMMV.

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It's likely the IRS to blame... I know you can prepay interest expense on a mortgage to some extent - with that being a deduction you can take in the year you make it on taxes.

If you prepay $1000 of interest on December 31st - for your filing on that year, you'd be able to take a deduction for that along with the other interest paid on same year. Probably the only time it makes sense is if you'll be in a lower tax bracket come the following year or think taxes or going down - since you're just taking a deduction in one year that you won't be able to in the next.

Would be nice if they automatically applied to principle, but you could write in to have them apply to principle instead.

Of course - wouldn't be surprised if someone or some agency sued them for such a policy at one point and now they are just covering their collective tail. Doesn't matter what the commonsense logical thing is - we'd have a helluva a lot fewer laws, shorter manuals, fewer liability release documents, etc - if commonsense/logic was what people followed and/or acted on. Too many either without commonsense or out there to milk the system when a loophole is noticed.

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OWC Larry
Other World Computing
[www.macsales.com]

Well whatever the reason, i don't see why i can't just call them up and have them set a preference somewhere in a database with my loan info so they know that any extra always goes to principal.

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__________________________________
There’s a guy wearing overalls with no shirt.
Which I think we all know is the International uniform for the last guy you’ll ever see.