I am torn about whether or not to make house payments next week through March. I have heard that this would be a good idea. Or should I just make the January payment and wait and see? I would appreciate any advise. Thanks! Lori

-- Lori (ABaby72@aol.com), December 20, 1999

Answers

Lori Why would you want to make the extra payments? If the system is so screwed up for several months the mortgage people will have their own problems. If you could not make the payment, they also could not process it. Keep your records up to date, from bank and from mortgage co., and sit! ( keeping your money out of the system might be a good idea. If the mortgage co. starts screaming for a payment,and you have cash, you will be in a very good negotiating position. "How much will you knock off the principal if I pay you today, Mr Mortgage Holder?")

The only rule in business is that there are no rules. Who says that your house is worth $125,000? And that your mortgage is worth $75,000? If things become real bad, perhaps your house is only worth $25,000. Then you have a bit of a problem. But your mortgage holder has an even bigger one.

-- gary elliott (gelliott@real.on.ca), December 20, 1999.

Good Point...If there are problems...You will probably need the cash for other things...Making early payments does not make ANY sense...IF you have the money to make the early payments then you surely don't need to worry...Hold on to that money..

BeffyMar Behind the Scenes

-- BeffyMar (beffymar@aol.com), December 20, 1999.

Another key point: when you pre-pay it is often assumed that these are to shorten the life of the mortgage, not alleviate the need to make payments in the next pay periods. Make sure this is clear before you pre-pay. I must say that when I moved out of the market, paying off (entirely; yesssssss!) to get effectively a 9.25% return on my money sure felt great.

-- Dave (aaa@aaa.com), December 20, 1999.

When I called Bank of America last week down in Cypress, CA, to make arrangments to make a payment for the months of Jan, Feb and Mar the cust. service rep told me that "I think that's a smart idea", but wouldn't say more. When I asked her why, she started backpedalling.

I insisted on having some form of reciept that they (Bank of America) would consider "legal proof" that these payments had been made, just in case something crapped out and I was unable to make the payment as usual.

They made note of it on the mortgage record there, and then I sent payment with a letter re-iterating our conversation and all discussed.

That way, if the postal system starts running at the speed of a slug, or if the Banks have trouble, or whatever, I will be just fine.

-- formerly (formerly@nowhere.zzz), December 20, 1999.